NAEA MEMBERS REPORT A MARKET SLOWDOWN AS STAMP DUTY INDECISION TAKES HOLD

Members of the National Association of Estate Agents (NAEA) reported last month that the housing market was clearly faltering under the strain of the Government’s indecision over stamp duty combined with the usual holiday slowdown and the current overcast economy.

Members reported a slight decrease in the number of houses available, sales agreed and percentage of first time buyers. Additionally, two areas that experienced an improvement last month were the average difference between the asking and sales price and the percentage of agreed sales fallen through.

Chris Brown, president of the NAEA, comments: “August was a tough month for the industry, both for the consumer and estate agent. It was a month of indecision and this evidently has had a profound effect on the market, as many consumers adopted a ‘wait and see’ attitude, whist waiting for a decision from the Government on stamp duty.

“Indeed, two polls were conducted in August asking members how they believed the Government’s indecision has affected the market, 92% agreed that the Chancellors remark had increased consumer concerns. In a later poll conducted at the end of the month, 98% of agents believed that consumer confidence was further damaged as speculation rose. With poll results like this it was clear that the property market in August would experience a slow down as clearly consumers were stalling on property related decisions due to the cloud of uncertainty and apprehension hanging over their heads. It was already a tough market and consumers are desperate for changes to be made, therefore a comment like this will of course have a major effect on the market place.

“However, now that a decision has been made, it is a positive push in the right direction but the stamp duty announcement is not enough to make a difference to the entire market. The Government needs to do more to address the problems in the market if anything is to change and improvements to be made. The NAEA continues to urge the Government to offer first timer buyers a stamp duty holiday.”

Sales per agent drops

The number of sales achieved per agent dropped slightly in August to 5 sales in comparison to 6 sales the month before. Again, an additional factor for the drop in sales could be attributed to consumers stalling during the purchasing process due to the Government’s indecision on stamp duty.
First time buyers take a break from the property market

August’s figures show that there was a decrease in the percentage of first time buyers with an average of 8.3% sales compared to 10.7% in July. The primary reason for this is the difficulty in obtaining suitable mortgages. This has been a major issue for several months and still clouds this group. Additionally, the indecision from the Government on stamp duty has not helped and rational buyers waited to see what would happen.
The number of house hunters increases

The number of house hunters on estate agents’ books rose from an average of 192 registered per agent in July to 207 in August 2008. The results show that there are still buyers out there who are keen to move however, they are looking at all the available options on the market before committing to a decision.
Housing stock takes a slight drip

The number of properties on agents’ books decreased slightly from 95 in July compared to 91 in August.
The average difference between the asking and sale price dropped to 5.9% from 6.1% the month before. This decrease shows that the both the seller and buyer are being more realistic when valuing their home due to the current state of the market but at the same time buyers realise that a deal can be made. The percentage of agreed sales that fell through also decreased this month to 10.22% compared to 11.36% in July. This is positive news as it suggests that those who are committed to buying have carried on the purchase process despite the Government’s indecision and the current state of the market.