Estate agents: Crisis? What crisis?

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The Independent Online

Property sales are stabilising despite shaky consumer confidence and the widening gap between supply and demand, according to estate agents.

Recent reports on house prices have been universally downbeat. But a National Association of Estate Agents (NAEA) report, published today, says that in April the number of agreed sales, the number of pre-sale viewings and the average difference between the asking and selling prices all levelled off, belying alarmist predictions that the market is heading into freefall.

"What people need to remember is that the market is stable and we are not seeing massive price drops," Chris Brown, the president of the NAEA, said. "There are still strong economic factors at play, such as high employment and low interest rates, and sales are still taking place. Moreover, people need places to live and property purchase remains a good long-term investment."

Buyers are being cautious, says the NAEA. But the number of viewings before a sale stayed level at 14, only two higher than the same time last year, and the average difference between the price tag and the eventual payment was also stable last month at 4.7 per cent.

Although the number of buyers on agents' books dropped by 12 to 237 in April, the number of sellers is on the rise, with 84 properties on average available in April, compared with 76 in March.

Actual sales have remained level since January – with the average agent closing seven deals per month – but have dropped significantly since the highs of 13 in April, May and June last year. First-time buyers are the worst affected by the current credit conditions, with the numbers buying down from 8.3 per cent in March to 7.7 per cent in April, continuing the precipitous drop from 13 per cent in December and 14.5 per cent in January.

But reports from elsewhere in the housing sector make grim reading. The Hometrack survey published yesterday said May was the eighth consecutive month of falling prices, caused by the falling number of buyers as more properties go on the market. Building companies are also feeling the pinch. Last week, the chairman of the Home Builders Federation said sales of newly built houses have "fallen off a cliff", while Taylor Wimpey, the UK's biggest homebuilder, announced plans to close 13 offices and lay off 600 staff. Persimmon has seen sales drop by 24 per cent this year, and Bovis Homes by 30 per cent.