New house sales fell by 16.7% in August, while available properties for sale soared, according to the National Association of Estate Agents (NAEA).
The monthly figures also highlighted an increase in time between instruction and sale, confirming the much trumpeted market slowdown.
Hugh Dunsmore-Hardy, chief executive of the NAEA, said: ‘House price inflation continues to hover around 17%, reflecting the issue of supply and demand. A significant increase in available stock during August, leads the NAEA to an expectation that agents will be recommending lower asking prices to reflect the changing situation. Our statistics lead us to believe the housing market may be entering a more subdued period. This may be the predicted soft landing.’
The NAEA pointed out first-time buyers may draw comfort from a slowdown in house price inflation.
In August, first-time buyers accounted for 20% of total sales, an increase of nearly 4% over July, but still between 10% and 15% lower than the average for the last quarter of 2001 and the first quarter of 2002. Overall, new applicant enquiries were up 28.6% on last month.
Non-conforming lender, Future Mortgages, has also noted these trends.
Richard Hurst, communications manager at Future Mortgages, said: ‘We have experienced tremendous growth over the last 18 months and now it is slowing down. It will not crash as it is cushioned by the good underlying economic situation. What we are approaching is an affordability issue, acting as a brake on the market.’
Another significant finding, according to the NAEA, is the fact that its estate agency members are reporting that vendors are increasingly willing to take advice on the price their property should be marketed at. This suggests they are serious about their intentions to move home, and not simply testing the market.