Holidays saw healthy sales
Home sales were healthy before and during the holiday period, according to the latest figures from the National Association of Estate Agents (NAEA). Following a difficult year, the December 2005 market appeared to be back on track, with sales figures up on the same time the previous year.
Consumer confidence seemed to be on the up as agents across the country reported record Christmas sales. Buyers who saw an opportunity, or who needed to purchase before Christmas, helped push sales through. Meanwhile, others continued to employ a ‘wait and see’ strategy over the festive period; with the average number of registered house buyers on NAEA estate agents’ books falling once again in December.
As expected for this traditionally quiet time of year, the number of sales agreed decreased between November and December – from 11 per agent to eight. However, the market was still healthy with sales up 33.3 per cent compared with the previous December. Encouragingly, the latest figures are back up to the level of those witnessed during December 2002 and 2003, demonstrating tangible signs of recovery after an uncertain year.
First-time buyers return
The percentage of buyers who are first-timers has risen steadily in the past few years, according to research from Propertyfinder.com. The figure is now at 37 per cent, its highest level in 15 months. At its lowest, a few years ago, the percentage of first-time buyers was an unhealthy 29 per cent. This bodes well as a sign of confidence in the present housing market, although the market has some distance to go first-time-buyer-wise before the long-term average of 46 per cent is once again attained..
Jim Buckle, chief executive officer of Propertyfinder.com, says, ‘The fact that more first-time buyers are returning to search for property is a very positive sign of a healthy balance returning to the housing market. The numbers are still below the long-run average, but it is encouraging to see more people gaining the confidence to take their first step on to the housing ladder.’
Rate of inflation slows
Inflation slowed to its weakest pace in five months in November, mainly due to cheaper petrol and air tickets, according to the Office for National Statistics (ONS). This development has some predicting a cut in interest rates in early 2006.
The price of energy refused to follow the downward trend, however, as gas and electricity prices climbed at their fastest rate in 22 years – due to limited supplies of gas and predictions of a particuarly cold winter to come.
The ONS said the consumer price index last month stood 2.1 per cent higher than a year ago, the smallest rise since June. This figure is down from 2.3 per cent in October, and very close to the Bank of England's two per cent target; this has led to predictions of an interest rate cut, although Mervyn King, governor of the Bank, has made his reluctance known.