Housing market moving a little Wednesday, 4th March 2009

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People buying houses are demanding bargains as expectations continue for property prices to fall.

There are homes being put up for sale and more are also finding buyers, but at prices well below sellers' expectations. As a result, the average sale price is now 88 per cent of the figure at which a property is first marketed, according to the latest survey from Hometrack, the housing data group

However, these numbers suggest signs of activity in a market that was very slow before. And new buyer registrations are rising by 17 per cent and with agreed sales up by 36 per cent in February, after falls in the previous few months.

There has also been word from Nationwide, which reported last week that there had been some evidence from estate agents and housebuilders that new buyer inquiries had picked up slightly as prices fall and interest rates are cut.

While the percentage increase in activity may appear relatively high, the underlying transaction levels of market activity are about 60 per cent lower than they were a year ago. As such, this increase in market activity is off a very low base and falls well short of what could be classifed as ‘green shoots' of recovery.

While demand for housing does exist, it was not at the levels of two to three years ago.

The pick-up in buyer demand is strongest in southern England, with rises of more than 20 per cent in the number of people registering with estate agents in London, the South East and the South West.