NAEA: UK housing market begins to shrink
However, despite this agents reported that sales levels held up, with the average branch selling seven properties in the month, the same as in September.
The National Association of Estate Agent’s (NAEA) market report for October showed that, with the festive period looming, activity levels had fallen. It is expected for the housing market to slow down in the run up to Christmas.
However Michael Jones, President of the NAEA warned that the traditional problem was being exacerbated by sellers unwilling to accept falling house prices and buyers suffering from restrictive lending criteria.
Only 218 house hunters registered with an estate agent in October compared to 247 in September, while the number of houses available for sale dropped from an average of 72 per branch in September to 67 in October.
The percentage of sales made to first-time buyers increased in October from 20% to 23%.
Jones said: “Buyers and sellers are inclined to wait until the New Year when they have more time to commit.
“But the housing market is also very price-sensitive currently. Many sellers believe that the lack of available housing stock means they can make a sale without lowering the price of their home. However house-hunters are also confident of a good deal.
“It is reassuring that sales seem stable and we have actually seen a slight increase in the percentage of sales made to first time buyers.
“But mortgage restrictions will need to be eased if we are to see any real increases across the market moving into the early part of 2011.”