Step-by-step Solution:

\[ \text{Let the original length be } L \text{ and breadth be } B. \] \[ \text{Original area: } A = L \times B \] \[ \text{New length (decreased by 5\%): } 0.95L, \quad \text{New breadth (increased by 5\%): } 1.05B \] \[ \text{New area: } A' = (0.95L)(1.05B) = 0.9975 \, (LB) \] \[ \text{Percentage change in area} = \frac{A' - A}{A} \times 100 = (0.9975 - 1) \times 100 = -0.25\% \] \[ \boxed{\text{The area decreases by } 0.25\%} \]