Richard Donnell, Hometrack's Director of Research comments on the report:
“The April survey of 1,500 agents and surveyors across the country shows further evidence of a housing market on the turn. The supply of homes for sale continues to outstrip demand. This is a trend that has been evident for the last quarter, but lies in stark contrast to the final months of 2009 when buyers far outnumbered the supply of properties for sale.
"The election is being cited as a factor behind growing buyer uncertainty and this is reflected in the number of viewings per sale which has been rising for the last three months from 10.4 in January to 11.2 in April. The growth in the number of sales agreed has also slowed significantly - rising just 6.3% this month compared to 13% in March.
"As the supply of homes for sales continues to outpace demand so the impetus for prices rises is set to wane. The bounce back in market confidence over 2009 was accompanied by a rapid firming in house prices. In April 2009 the proportion of the asking price being achieved was 89%, today this figure may have risen to 94% but it has also begun to plateau.
"This suggests that agents are finding it increasingly difficult to continue to push pricing whilst maintaining sales volumes. A similar trend is evident in the time to sell which has also leveled - at 8.3 weeks - having improved from an average of over 10 weeks this time last year.
"The changing supply/demand balance together with clear evidence of growing price resistance and caution amongst buyers, suggests that we are set to see less upward pressure on prices in the near term.
"Despite this the survey found that average prices were up by 0.2% over April - the year on year rate of growth stands at 1.8%, up from 1.3% last month. The monthly increase is down slightly on the 0.3% gains posted in February and March.
"Yet there is a danger of focusing too hard on the headline rate of growth which is being skewed by above average price rises in London. Prices in the capital rose by 0.6% over the month, distinctly flattering the overall headline rate of growth. All other regions posted average or below average growth over April ranging from -0.1% to +0.2%.
"The strongest pricing continues to be in southern England where the proportion of the asking price is over 94% - in the South East it is running as high as 95.3%. Across all other regions pricing is weaker and other indicators, such as time on the market, suggest little upward pressure on prices and more sluggish market conditions.
"As we highlighted in February, it was clear that given the strong end to 2009 that spring 2010 was unlikely to compare with a traditional start to the selling year. There has been evidence for some months that the supply/demand balance has been changing steadily but the buyer slowdown has been exacerbated by the announcement of a May election.
"The bounce in market confidence over 2009 was all about pent up demand feeding back into an undersupplied market. However, the fundamental issues which have plagued the economy for some time still remain. Rising unemployment, lack of mortgage funding, public spending cuts and the prospect of tax rises post-election, continue to act as a back-drop to a fragile and increasingly polarised housing market.
"The near term prospects for the housing market are intrinsically linked to demand which in turn is reliant on strong consumer confidence. The outlook for the economy and jobs market as well as household finances all impact on housing demand and buyer behaviour.
"With an election well under way, it is not surprising that buyer’s are currently hesitant in their decision making, the question is whether market sentiment will improve once the result of the election is known.”
