House buyers tempted by more 'realistic' pricing

Positive indicators emerged in the UK property market last week. A survey from the National Association of Estate Agents (NAEA) found a substantial increase in the number of people registering an interest to buy property and sales completed.

The NAEA's monthly market survey found that the average branch had 299 househunters on its books in May – up from 265 the previous month and 247 in May 2008. For the second month running, estate agents also reported increasing sales. The average branch sold 10 properties, a 30 per cent increase on the same time last year and double that sold on average in August 2008.

"NAEA members are showing that there are buyers a-plenty out there. More often than not, these are also potential sellers who are at the beginning of the process – so there is bound to be a lag which creates a shortage of properties in the short term," said Gary Smith, the president of the NAEA. "With mortgage interest rates at low levels and prices now far more realistic, home ownership in the UK seems to be set to lead the way out of the recession."

However, many lenders are insisting on large deposits and being strict about how much they lend.