The property market rocketed into 2006 with both the numbers of house buyers on estate agents’ books and the number of sales having increased in January.

Meanwhile, the number of properties available dropped as the increased demand outweighed supply, according to the latest housing market survey from the National Association of Estate Agents.

NAEA president Christopher Hall said, "Confidence is key to a buoyant market – we are delighted to see more buyers month on month committing to a purchase and feel the New Year has inspired increasing levels of confidence."

Applicant numbers rise for first time in five months

According to the survey, the beginning of the year brought further confidence in the housing market, building on the previous three months, as sales agreed increased 20% in January, from 8 per agent to 10, taking the figures to similar levels experienced in January 2005.

The number of house buyers on NAEA agents’ books increased in January for the first time in five months. Numbers went from 302 to 355 per agent in a rise of 17.5%, returning to the healthy levels witnessed at the same time in 2005, when the survey recorded 359 buyers per agent.

With interest rates remaining static after falling in August last year buyers are demonstrating certainty in the future stability of the housing market.

Housing stock drops as demand outstrips supply

Housing stock levels dropped in January as sales overtook the number of new instructions for each agent. The number of properties on agents’ books fell 6.9%, from 72 to 67 per agent, compared with 75 in January 2005.

The time taken to sell a property was also slightly reduced, from 18.4 weeks to 18.1 weeks.

However, the number of viewings before a sale was secured increased from 11 viewings to 12 demonstrating that levels of caution still remain whilst there is increased interest.

Sellers help sales by being realistic

Buyers and sellers alike benefited from sensible pricing in January. Home sellers helped themselves achieve successful sales by being realistic about the value of their home, thereby attracting a serious buyer in a shorter period of time.

The percentage difference between asking price and sale price dropped from 4.0% in December to 3.7% in January, further closing the gap from the 4.5% difference seen in June last year.

First time buyer sales lower than same time last year

First time buyers’ share of property sales was 9.06% in January, compared with 11.7% in January 2005, demonstrating the worsening situation for those looking to get on the property ladder for the first time. While the January figure was up on December’s 7.04%, it is dramatically reduced from those figures recorded by the survey in 2000 and 2001, when first time buyers on average accounted for over a quarter of all property sales each month.

Lettings market remains stable

The lettings market was consistent in January, with the number of vacant properties and tenancies terminated remaining at 15 and 5 per agent respectively. Meanwhile, the average time taken to let an empty property rose to 14 weeks, compared with 13 in December.

Christopher Hall commented: "Buyer optimism combined with seller realism has led to encouraging sales levels. Assuming interest rates and employment levels remain the same for the time being we can expect a continuation of this positive trend."

"Realistic pricing gives shrewd homeowners a huge advantage over those who try to squeeze as much as possible out of sellers and we continue to advise them to employ this more cautious strategy."