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Outlook for property remains mixed

Outlook for property remains mixed

Category: Mortgages

Updated: 18/01/2011
First Published: 18/01/2011

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Sales in the housing market stabilised at the end of 2010, but the outlook remains mixed.

In the three months to December, the average number of sales completed by surveyors was 15.2, up from 14.8, according to research by the Royal Institution of Chartered Surveyors (RICS).

Surveyors' expectations for sales over the coming months edged up, with 8% more expecting sales to increase rather than decrease, up from 6% more in November.

In the view of many surveyors, the mortgage market will begin to pick up again in the spring.

Activity was highest in the East Midlands and Yorkshire and the Humber in the last three months of the year, with the number of completed sales averaging 19 and 18 per surveyor in those regions.

East Anglia saw the fewest completed house sales, with an average of only 10 reported. There remain many obstacles in the way of a housing market recovery, however, as concerns about the economy continue to keep some potential buyers away, as does the lack of available finance.

The freak December weather also had an adverse effect, as surveyors reported a fall in the number of sales.

New buyer enquiries – a key indicator of demand – fell for the seventh consecutive month, as surveyors reported that lending constraints, particularly for first-time buyers, remain the biggest barrier to any strong improvement in the market.

"Although bad weather hit the housing market during December sales levels have remained stable," said Jeremy Leaf, RICS spokesperson.

"While lack of supply, and more importantly demand, continues to impact heavily, surveyor sentiment does appear more positive for the coming months.

"The key issue now is mortgage finance. However, with commentators suggesting lending constraints are unlikely to be eased, it is hard to envisage a meaningful increase in sales levels in the near term."

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