Royal Institute of Chartered Surveyors Property Survey

The latest property market survey from the Royal Institution of Chartered Surveyors suggested that new buyer enquiries increased at the fastest pace since records began a decade ago.

The strongest increases were in the North and London, followed by the East and West Midlands.
It comes as the average number of properties on estate agents books dropped from 58.5 in May to 56.9 in June, 32 per cent lower than a year ago.

A shortage of properties and renewed interest from buyers is like to help boost prices, with 18.1 per cent more chartered surveyors report a fall than a rise in June compared to 43.8 per cent in May.

Confidence in future prices has also increased, turning positive for the first time since May 2007.

Jeremy Leaf, spokesperson at RICS, said: “Although the market is showing signs of improvement, it is unlikely that there will be a sustained upturn while mortgage lenders remain risk adverse.”

He added: “A lack of stock on the market is providing a platform for modest price increases. While supply remains tight, the market may continue to show tentative signs of firming but instructions are starting to increase in some regions and this could dampen any meaningful recovery as long as economic conditions remain quite so uncertain.”

Neil Foster, a RICS member based in Newcastle, said: “Buyers are increasingly willing to transact but many remain unable to do so as a consequence of constraints imposed by lenders.”

And Anthony Jamieson, a RICS member based in Surrey, said: “There is now a definite shortage of instructions and with the market having shown signs of improving, there are a number of good quality purchasers wanting to buy but with nothing to look at.”

Estate agents gave the strongest indication yet that the housing market slump is over, reporting that the number of people looking to buy a home is at the highest level in a decade.

New buyer enquiries have risen every months since November and are currently climbing at the fastest pace since August 1999, according to the latest property market survey from the Royal Institution of Chartered Surveyors.

It said 48 per cent more estate agents reported a rise rather than a fall in interest from new buyers in May.

The survey also suggested that the rebound in enquiries is feeding through into increased sales, with the number of properties that estate agents are selling over three months edging up from 10.6 in April to 11.8 in May.

Ian Perry, a spokesman for RICS, said: “On the face of it, the housing market does appear to be close to bottoming out with activity picking up in a material way and prices at last stabilising.

“However, with the economic backdrop still quite uncertain, unemployment is set to continue increasing sharply and finance for first-time buyers is still in short supply, there are a number of significant obstacles for the market to overcome over the coming months.”

The RICS survey also disclosed that there has been a reduction in the overall number of estate agents reporting falling prices.

It said 44.1 per cent more estate agents reported prices were falling rather than rising in May, compared to 58.7 per cent the previous month.

It comes after Britain’s biggest mortgage lender, Halifax, said house prices dropped 16.3 per cent during the past year to £158,585.

Mortgage experts warned that borrowers may still find it difficult to find an affordable home loan as lenders began raising their rates, particularly on fixed-rate deals.

Melanie Bien, of mortgage brokers Savills Private Finance, said: “While this is excellent news, we are not out of the woods just yet as fixed-rate mortgages are starting to rise and lenders retain tight criteria, which are making things more difficult for borrowers.”

Lenders have defended high rates in the past saying that the cost of the borrowing is based on so-called Libor or swap rates rather than the Bank Rate.

But research shows that the profit margins between the rates that banks charge their customers and Libor or swap rates have widen since the beginning of the credit crisis from less than 0.4 per cent in August 2007 to more than 2.7 per cent today.

Keith Johnson, a RICS member based in Durham City, said: “While the market is still somewhat erratic and very price sensitive there are good signs of recovery.”

And Richard Sayer, a RICS member based in Northumberland, said: “This is an excellent market for many buyers and sellers to be testing their options.”