A rise in both sales and buyer enquiries, combined with a reduction in stock levels, has begun to provide some stability to UK house prices.
The Royal Institution of Chartered Surveyors' (RICS) UK housing market survey for May shows an increase in the number of new enquiries. Forty-eight per cent of chartered surveyors reported a rise rather than a fall – the seventh consecutive monthly gain.
Actual sales also rose, although levels are still quite depressed historically, meaning the recent upturn in enthusiasm is beginning to be borne out in completed property deals.
The average number of properties sold over the last three months has increased from 10.6 to 11.8. Furthermore, the net balance of surveyors who reported a fall in house prices fell from 58.7 per cent to 44.1 per cent.
The number of properties on the books of surveyors is falling; the average dropped from just over 69 to 58.4 this month. Decreasing levels of stock, as well as increased activity, is providing some much needed support for house prices.
In fact, the sales-to-stock ratio, which is considered a key indicator of market slack, increased markedly from 15.2 per cent to 20.1 per cent.
Expectations are also improving as the outlook for house prices and property sales improved significantly in May. A net balance of 40 per cent more chartered surveyors are expecting sales levels to rise – the highest figure since the survey began in 1998.
ust 11 per cent more surveyors predict a price fall rather than a rise, compared with 42 per cent last month. This is the best figure since July 2007.
"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," said RICS spokesperson, Ian Perry.
"However it is important to remember the lack of supply has been as important in underpinning prices as the rise in demand."
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