Number of homes for sale up 25%

The number of properties being put up for sale has soared by 25% (Getty Images)

The number of properties being put up for sale has soared by 25% year on year as sellers become more realistic about how much their homes are worth, research indicated today.

The average estate agent branch had 70 properties on its books in February, up from just 56 a year earlier, according to the National Association of Estate Agents (NAEA).

The group said the rise in sellers suggested there was renewed confidence in the market, while there were also signs that people were being more realistic about the price at which they should market their home.

During the past year, many new sellers have marketed their property at a level that does not reflect the recent price correction, with people often just "testing the water", contributing to the general housing market stagnation.

The rise in sellers was matched by a further increase in buyers, with the average estate agent having 268 registered buyers, the third consecutive increase and the highest level for seven months.

The NAEA said the rise in sellers meant the supply of property was able to keep up with renewed demand, which should lead to some short-term stability in the market.

But over the longer term, it could put downward pressure on prices, as the mis-match between supply and demand was one of the key factors that supported prices during 2009 and early 2010.

There are also concerns that interest rate rises, as well as Government spending cuts, will hit consumer confidence during the coming months.

The number of agreed sales rose slightly during February, with the average branch selling eight properties, up from six in January and above the recent average for the time of year.

The proportion of homes that were sold to first-time buyers also edged up from 24% to 25% during the month.

NAEA president Michael Jones said: "The picture is still very variable across the UK with agents reporting much higher growth in inquiries and stock availability in some regions than others.

"Undoubtedly, broader economic constraints on spending continue to impact on consumer confidence, especially at a first-time buyer level, and the effect of the public sector cuts has yet to be fully felt.

"With limited mortgage availability and the concern about a likely rise in interest rates still putting off many of the people who otherwise would be looking to buy, it is important that the Government does everything it can to encourage growth at this crucial stage of the recovery process."