First-time buyers are slowly reappearing in a housing market showing signs of recovery, according to a survey published today.

The number of sales to first timers has risen for the second month running to more than 17 per cent, according to the Housing Market Survey of July from the National Association of Estate Agents.

The number of properties for sale and the number of new buyer inquiries had returned to levels seen in last year's boom period.

While the number of sales was above the all-time low of 14 per cent back in May this year, it remained below the 2002 average of about 25 per cent.

But the association called the further improvement "evidence that first time buyer confidence is returning and that sustained recovery in the housing market will be seen during the coming months".

Association president Melfyn Williams said: "With interest rates left unchanged this month at an historic low, the rest of the year should see a steady improvement in both house price and number of transactions."

Annual house price inflation, at 8.5 per cent, was broadly the same as last month - evidence that the sharply declining trend in house price inflation since the beginning of the year was over.

Other evidence of a reviving housing market came from the reduction in the average number of viewings per sale - 15.7 viewings per sale against 27.4 last month.

This showed people might be finding their ideal property more quickly, the association said.

The size of discounts achieved off the asking price had also reduced this month.

On average, house buyers were only achieving a 3.4 per cent discount to the asking price, against the 5.4 per cent discount achieved last month.

Sellers were likely to be setting prices more realistically and buyers were finding it more difficult to obtain cut-price deals, the association said.

It now took an average of seven weeks from the time a property was put on the market to agree a sale and a further nine weeks between sale agreed and exchange of contracts.

Paul Boswell, of Meeching Estate Agents in Newhaven, said: "The market in East Sussex is certainly not as good as last year.

"The market has been very quiet but there are signs of buyers gaining confidence and returning."

Peter Hughes, of HJ Burt & Son in Steyning, said: "In rural West Sussex, there is plenty of activity in the market, with a good supply of property across the board, but buyers are reluctant to commit themselves."

Monday August 11 2003