Buyers continue to flood the market, according to the Hometrack October survey. Estate agents have seen buyer interest increase by a further 2.1% this month, bringing the total increase in buyers this year to over 22%. Despite further house price falls, Hometrack is optimistic for 2006.
More buyers in the market and a greater level of confidence have led to an increase in activity of 5.9% this month bringing the increase over the last three months to 15.5%. John Wriglesworth, Hometrack?s Housing Economist, comments: ?The key feature of the market this month is a significant increase in house sales activity, helped by more buyers returning to the market?.
According to Hometrack, it is still very much a buyers? market. Despite buyer activity, supply still exceeds demand. ?Buyers are continuing to negotiate large discounts off asking price, and have greater bargaining power,? says Hometrack, ?Accordingly, house prices will continue to fall until supply and demand realign.?
The recent survey indicates that buyers are continuing to negotiate large discounts off asking price and accordingly sales price as a percentage of asking price has fallen by 0.1%. Nevertheless with more buyers in the market, houses are selling faster than they were last month.
Of all the counties, only one has seen prices rise this month, while 24 have remained static, and 32 have seen price falls. Lancashire has seen price rises of 0.1%, while Cambridgeshire, Leicestershire and Suffolk were among the counties remaining static. The counties reporting the worst price falls this month are Wiltshire (-0.5%), West Midlands (-0.3%), South Yorkshire (-0.3), and Nottinghamshire (-0.3%).
Hometrack believes that sensible pricing is the key to swift selling. ?Vendors have been painfully slow adjusting their asking prices to market clearing levels and this is prolonging the pain of excess supply in the market?, Mr Wrigglesworth explains, ?Future house price falls are inevitable over the next few months despite transactions improving.?
Hometrack remains optimistic for next year; ?Baring interest rate rises or significant jumps in unemployment, house prices should resume their upward path before the middle of next year,? he concluded.
