Buyer interest grew across the UK last month as confidence in the housing market continued its gradual increase, says the latest RICS housing market survey (11 December 2012).
Enquiries from would-be buyers saw a rise in most parts of the UK last month and have now grown steadily since the end of the summer (net balance +11%). Although demand is still at a historically low level, it would appear that those who are in a position to do so are gradually looking to test the market.
Meanwhile, the amount of homes coming up for sale remained fairly flat during November (net balance +4%). Very little movement has been seen in terms of new instructions for over two years and this has contributed to the current anaemic state of the market. The sector will be hoping that the government’s recent announcement of funding to free up land for development in England will have the desired impact and increase availability.
Moving on to prices, modest drops were visible in most areas, albeit at a slower pace than was seen earlier in the year. A net balance of nine percent more chartered surveyors reported falling prices during November. While slightly up in October’s reading, this still suggests that the market is now beginning to stabilise.
Across the UK, London was once again the only part of the country to see prices increase, with surveyors in the capital reporting a net balance of +40%. Northern Ireland and Wales experienced the most significant drops with respondents in those areas reporting net balances of -49 and -36% respectively.
Looking ahead, chartered surveyors are optimistic that activity levels should continue their gentle rise with 14% more respondents expecting sales to increase rather than decrease over the coming three months. The price picture is, however, likely remain rather flatter by way of contrast.
Peter Bolton King, RICS Global Residential Director said:
“There is certainly some optimism creeping back into the housing market, and it is encouraging to see an increase in potential buyers across parts of the country where the market has particularly suffered in recent years. That said, there is still a long way to go and the long standing barriers to home ownership are still very much a problem for the likes of first time buyers.
The announcement in last week’s Autumn Statement of funding to unlock large sites for house building is a step in the right direction, and the Funding for Lending scheme is beginning to bear fruit for potential buyers. However, the macro economic picture continues to weigh heavy on the market and continues prevent any really significant boost in activity.”
Nick Hopkinson, Director of property company, PPR Estates, commenting on today’s RICS November 2012 Housing Market Survey said:
“UK house prices continue to fall slowly outside the London billionaire bubble. In fact, if you include inflation, prices have fallen by 25%-plus in real terms across most regions since the 2007 market peak. Transaction levels remain 50% below that of a functioning market and lending remains heavily restricted to all but the richest buyers as we end 2012. Well over 1 million households are stuck in negative equity and are now effectively mortgage prisoners in their own homes.
UK PLC continues to teeter on the brink of recession with further austerity and global economic uncertainty likely to continue for several more years according to even the most optimistic forecasts. Despite the sound-bites, It is difficult to see how Government initiatives to encourage more mortgage lending are either prudent or likely to be effective against such a backdrop. Seller and buyer appetite to do deals is likely to remain very low with 2013 is looking like another year of sales famine for the property market.”