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Hometrack: New buyer levels rise 15%
The number of new buyers increased by nearly 15% in February as a mix of seasonal and pent-up demand fed into the market after a weak second half of 2010, reported Hometrack.
This was the first time in eight months that Hometrack has recorded a rise in demand for housing.
According to its latest survey, there was a 14.7% increase in new buyers registering with estate agents, after the market saw a 20% decline in new buyers in H2 of 2010.
The surge in demand has helped to limit price falls in England and Wales to 0.2%, the smallest decline for six months, Hometrack said.
There was also a 7.5% increase in the number of homes for sale during February, the highest monthly increase in three months.
Around a quarter of estate agents also reported a 25% increase in sales agreed over last month.
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Richard Donnell, director of research at Hometrack, said: “This is the first increase in demand for housing for eight months and represents a mix of seasonal and pent-up demand feeding back into the market.
“Weak market conditions over late 2010 did bring some benefits, not least a rapid tightening in supply and a modest re-correction in pricing levels. While the number of new homes coming to the market has grown by 7% over February, the 25% increase in sales agreed will further erode supply and support the continued decline in the rate of price falls.”
Donnell added that this in turn would improve price stability in the short term and that lower price falls would be sustained if demand for housing continued to grow in the coming months.
The Hometrack report revealed that demand would remain the key factor for pricing and market activity in the coming months.
“We expect a continued modest pick-up in demand over March but the timing of interest rate rises is critical. Any interest rate rises in the near term are likely to impact market confidence to a greater degree than affordability,” added Donnell.
On a regional basis, house prices remained static in London, after dropping by 3.6% during the previous seven months.
Across the other regions the rate of price falls slowed apart from the North where falls increased to -0.5%.
The strongest market conditions were seen in the South of the country.