The revelation based on the latest figures by the NAEA (National Association of Estate Agents) is a slowdown in the residential housing market.
MortgageStrategy news found the average asking price in March 2007 to be £223,731 as against £213,259 in February 2007. The market lived up to seasonal expectations, as buyers, sellers and final house sales remained unchanged from the previous year's level with a slight rise in activity from February. The NAEA in news published on MortgageStrategy stated, "First-time buyers have maintained their improved market share from February and are up on the levels reported in March 2006 despite another imminently expected Bank of England base rate rise".
The recent reduction in interest rates of the Bank of England is believed to have sparked borrower confidence leading to a boom in the country's property sales. In addition to this were favorable interest rates on mortgages and practical pricing by sellers to woo back buyers towards the housing market.
Strong fundamentals continue to hold up the market, facilitated by the UK economy with over 57 successive quarters of growth being recorded. Employment continues to play a crucial role in influencing housing demand with continuous growth. Employment went up by 56,000 in the three months preceding September 2006 in contrast to the previous quarter. The rise in house prices was also a result of a lack of supply.
Due to demand outstripping supply in the residential housing market across the UK without respite, upward pressure is expected to continue on house price. Potential buyers of property went up in March by 11.6% from February and compared to the same period the previous year, by 3.7%.
As per the views expressed by a research analyst at RNCOS, the market will cool down due to a combination of recent interest rate increases by the Bank of England and further increase to 5.25% in the coming months. Increase is also expected in repossessions with worsening affordability conditions. However on the whole, the solid housing demand will reduce the damage on prices.
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