Housing market 'revitalised'

28th Feb 2005, a Monday

New buyers are returning to the housing market confident that interest rates have peaked, Hometrack figures showed this morning. The number of buyers registered with the property website jumped 28.5% last month

The size of the increase suggests a revitalisation of the market," said Hometrack.

The same study also found a 36% increase in completed sales in February, compared with January. At the same time, it said the average time to sell a property fell marginally to 7.6 weeks, the first fall since May 2004.

Despite these positive signs, Hometrack said the average house price fell 0.2% last month - the eighth month in a row that prices have gone down.

Seven counties in England and Wales reported price rises, with South Lincolnshire, Surrey, Greater Manchester, Birmingham and Devon recording an increase of 0.1% up to 0.3%.

The best performing cities were Warwick, Bournemouth, Gloucester, Manchester and Middlesbrough. Leicester, Chester, Stoke- on-Trent, Lincoln and Sunderland were among the cities to report falls. Prices dipped across Leicestershire, the East Riding of Yorkshire, Staffordshire, Merseyside and East London.

Hometrack said the biggest increase in the number of buyers registered with agents was in East Anglia at 39.9%, followed by 39.7% in the East Midlands and 38.3% in the South East.

Those in East Anglia reported a 51.1% increase in sales agreed compared with January. The figure was 45.4% in the West Midlands and 4% in Greater London.

Hometrack's housing economist, John Wrigglesworth, said: “After eight months of housing market doldrums, the first signs of a robust recovery have appeared. A significant rise of new buyers, and an even more marked increase in agreed sales have stabilised prices. An analysis of recent trends suggests the worst is definitely over in terms of price falls.

“We expect prices to resume their long-term inevitable upward movement before the end of the year, fully compensating for the recent falls” He added: “A more stable interest-rate outlook, ongoing low unemployment, and rising household incomes will all help support rising house prices by the end of the year.”