January 'saw rise in properties for sale'

January 'saw rise in properties for sale'

The number of properties for sale increased significantly in January, according to data from the National Association of Estate Agents (NAEA).

The figures show an increased number of sellers coming into the market and a small rise in the average property price, up 0.14% on December's average to £209,561. This is the first time since May 2004 that the price has not fallen, suggesting the price correction may be at an end.

The renewed confidence of sellers was matched by an increased number of enquiries from potential buyers. However, homebuyers remain in short supply and the large amount of housing stock available means there is increased competition to attract them which has pushed prices down.

According to estate agents, buyers are achieving an average discount of 4% off the asking price, down from 5.5% last summer. This is lower than the typical 7% discount quoted by property market commentator Hometrack in its January price survey, but enough to suggest it is still a buyers' market.

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The competition for buyers is increased by the lack of first-timers entering the market. The NAEA said sales to this group of buyers represented just 11.7% of those agreed in January, down from 16% in December 2004.

The NAEA noted an upturn in agreed sales, supporting the latest figures from the Royal Institution of Chartered Surveyors (Rics). Sales remained subdued in January but were up from sharply from December's low and had almost returned to the levels of last summer. Yesterday, Rics reported the first rise in newly agreed sales since April last year.

Richard Hair, president of the NAEA, commented: "With interest rates unchanged and the chance of them being lowered in the next few months, there seems to be little reason why the brisk activity seen so far will not continue into 2005. As a result, come Easter, we expect to once again be witnessing gently rising property prices across most of the country."

However, he noted the impact continued price rises will have at the lower end of the market. "With first-time buyers already at dangerously low levels, the necessity to help this group will only grow," he said.

Guardian Unlimited © Guardian Newspapers Limited 2005