Potential buyers are continuing to return to the property market following steep house price falls and successive interest rate cuts, according to new research.
The Royal Institution of Chartered Surveyors said that buyer inquiries rose for the third month in a row during January, with 16% more surveyors reporting an increase in interest than those who saw a fall.
The return of house hunters boosted surveyors’ optimism about future sales, with 10% more surveyors expecting transactions to pick up in the coming months, than those who thought they would fall.
The fall in sales agreed during the three months to the end of January also stabilised, with the average chartered survey estate agent arranging 9.9 sales, down only fractionally from an average of 10 during the previous three month period, although the figure was still the lowest level on record.
RICS spokesperson Jeremy Leaf said: ‘This interest has yet to translate into sales but transactions may pick up in the coming months if the Government follows through on its recent announcement and introduces guarantees for the issuance of residential mortgage backed securities.
‘The latest cut in interest rates may improve confidence for those on the margins, encouraging buyers looking for more attractive finance deals.’ (Check out our mortgage finder to see if you could benefit from moving your mortgage).
Short term pain
But surveyors remain gloomy about the prospects for prices in the short term, with 76.3% more reporting price falls during January than those who saw rises, up from 73.9% more in December.
RICS members expect further price falls going forward, with confidence in prices falling to its lowest level in the survey’s history.
The organisation said the main factor that was depressing house prices was still the large stock of unsold homes on estate agents’ books, relative to the pool of able buyers.
The average chartered surveyor estate agent had 75.4 homes on their books in January, 10% less than a year ago and nearly 50% down on the peak in March last year.
The group attributed the fall to homeowners opting to rent out their property rather than sell it for a reduced price in the current market.
Surveyors are most optimistic about sales rising in the south of England, with a balance of 38% of surveyors in London expecting transaction volumes to rise, more than double the 18% who predicted an increase in December.
The number of surveyors reporting price falls also improved in the south east, the north and the north west during January, although it deteriorated elsewhere across England and Wales.
© Press Association 2009
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