Three quarters of homes sold below asking price as supply increases

Three quarters of properties sold by National Association of Estate Agents (NAEA) member branches in August were for less than the asking price, according to the organisation's latest report.

The figure represents a slight improvement on July, when 79% of homes were sold for less than originally advertised. 

The NAEA says that the housing market is 'moving in the right direction' as supply amongst its members hit a six-month high last month.

The average NAEA member branch had 41 properties on its books during August, the highest figure recorded since an average of 54 was posted in March.

Demand among buyers fell during August, with the average branch having 287 prospective buyers registered, down from 298 the previous month.

First-time buyers (FTBs) may have benefited from the summer slowdown, with 28% of sales made to those taking their first steps on the property ladder, up from 25% in July and 20% in August 2015.

The NAEA's Housing Market Report is based on a sample representing 1305 estate agent branches. 

Meanwhile, last month's interest rate cut may not have the impact on the market that the Bank of England anticipates.

Just two in five of the agents surveyed by the NAEA said they expect demand to grow as a result of the base rate being halved, while 25% said they think it will see first-time buyers getting more 'cut through'.

"Although we have seen a slight drop in demand, the fact that supply has risen means more choice for those that are looking for a new home and we can see the impact of that because the rise in sales to FTBs was higher than we normally see in August," says Mark Hayward, managing director of the NAEA.

"News from the Treasury this month that government deposits on the Lifetime ISA can be used towards the initial deposit to secure a property and the impact of interest rate cuts will also raise confidence in FTBS that now is a good time to be looking to buy.”