Glimmer of hope in homes market

Nov 19 2008 Jez Davison, Evening Gazette

A LOCAL estate agent has claimed the housing market has reached its lowest point as new research showed the number of properties changing hands rose for the second month in a row during October.

The average estate agent sold seven properties during the month, up from six in September and a record low of five in August, according to the National Association of Estate Agents (NAEA).

The group said some of the increase was likely to have been driven by buyers adjusting their asking prices to more realistic levels.

The findings are in line with research released by Rightmove earlier this week which showed that sellers had slashed their asking prices by 2.9% during the four weeks to November 8 in a bid to find a buyer before Christmas.

John Newhouse, managing director of Tees Valley estate agency Roseberry Newhouse - which launched a new lettings arm earlier this year - said he had seen a rebound in house sales, albeit at the cheaper end of the market.

He said: “Now is a good time to buy. In the New Year people might not get the bargains that are on offer now.”

He said as interest rates dropped further, mortgage rates could become “more attractive”, leading to a further boost in sales and even a supply shortage at the higher end of the market.

But he added that lenders’ reluctance to fund loans was stifling the market.

“We have lots of clients who would like to buy but can’t get access to funds,” he said.

Mr Newhouse disagreed with reports that the glut of unsold properties coming on to the rental market is depressing prices.

According to the Royal Institute for Chartered Surveyors (RICS), the net balance of Chartered Surveyors in the North of England reporting rises or falls in rents fell from 28% in quarter two to -4% in quarter three.

But the region fared better than the national average, with the UK net balance falling from 31% in quarter two to -12% in quarter three - the lowest level in the survey’s history, with London and the South-east hardest hit.

The survey said demand for rental property in the North of England also remained positive in quarter three, and RICS said further house price falls expected next year could lead to opportunities for investors with “the right product for the right market place”.

Spokesperson James Scott-Lee said: “The lettings sector has witnessed a boom in 2008 as sales in the housing market continued to slow.

“Many have been able to take advantage of rising rents to secure good returns.

“However, the market place has become more and more competitive as many vendors have been forced to become amateur landlords, creating an inevitable downward pressure on rents where supply has matched demand.”