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Estate agents see 2006 opening on a high

The National Association of Estate Agents (NAEA) has released figures from its latest housing market survey revealing healthy sales leading up to and over the Christmas period.

Following a difficult year, the December 2005 market appeared to be back on track with sales figures up on the same time the previous year, said the estate agents' body.

Consumer confidence seemed to be on the up as agents across the country reported record Christmas sales. Buyers who saw an opportunity or who needed to purchase before Christmas helped push sales through. Meanwhile others continued to employ a 'wait and see' strategy over the festive period, with the average number of house buyers on NAEA estate agents' books falling once again in December.

Sales pushed through for Christmas

As expected for this traditionally quiet time of year, the number of sales agreed decreased between November and December – from 11 per agent to 8. However, the market was still healthy with sales up 33.3% compared with the previous December, when the survey recorded an average of 6 sales per agent.

Encouragingly, the latest figures are back up to the level of those witnessed during December 2002 and 2003, demonstrating tangible signs of recovery after an uncertain year.

There was more good news for sellers as the number of viewings per sale decreased for a second month running, down from 12 to 11 in December, as buyers either hurried to move in before Christmas or secure a property before the year end.

Buyer applicants in seasonal fall but pipelines healthy for start of New Year

Buyer applicants registered on NAEA agents' books dropped for the third month running from 342 to 302 per agent, in a fall of 11.7%. This is expected for the time of year, as traditionally buyers turn their minds to other matters over the festive season. However, applicant numbers appear to be on the increase again this January indicating a healthy start to 2006.

The average difference between asking price and sale price rose in December from 3.9% to 4.0% demonstrating a slight increase in unrealistic pricing by sellers over the Christmas period.

SIPPs u-turn to aid first time buyers

Following the Chancellor's shocking revelation that residential property will no longer be allowed as part of a Self Invested Personal Pension (SIPP), the upside is that first time buyers have been spared an intense battle with UK buy to let investors. The government's u-turn is likely to mean less people investing in typical first time buyer accommodation, giving first timers some breathing space.

First timers need further encouragement

The number of first time buyers decreased in December with their share of the market dropping from 8.4% to 7.0% – one of the lowest figures recorded by the survey yet and one possibly fuelled by investors purchasing with a view to putting their purchase into a SIPP in retrospection.

Moving into 2006, the NAEA urges the government to put first time buyers at the top of its agenda. It needs to carefully review its policies on stamp duty and inheritance tax in order to give first timers the best chance of success.

Good prospects for 2006

NAEA President Christopher Hall comments: "Once again a property crash was averted in 2005 despite forecasts at the beginning of the year from doom mongers to the contrary. Many of us predicted a slow but steady year, which 2005 indeed proved to be."

"One of the defining characteristics of the 2005 property scene was the reluctance of sellers to market their properties at comparative selling prices as opposed to asking prices. The year proved, yet again, an urgent need for buyer commitment prior to making an offer, for example in the form of having a mortgage in principle in place."

Prices eased during the year and there is no doubt it was a tough one for estate agents. Since the lowering of interest rates in August, however, confidence quietly increased and the latter three months produced high numbers of sales and more registered applicants."