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Housing market remains sluggish

Housing market remains sluggish

Category: Mortgages

Updated: 08/02/2011
First Published: 08/02/2011

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 It is now over 6 months old so the content may be out of date.

The housing market remained sluggish during January, due to continued lack of buyer demand and low levels of properties coming to the market.

The Royal Institution of Chartered Surveyors (RICS) said that potential buyers remain cautious about the outlook for the economy and the possibility of mortgage rate increases later in the year.

The number of newly agreed sales continued to drop at a broadly similar pace to the past few months, while weakness in market activity was also reflected in actual sales transactions, which slipped back to their lowest level since June 2009.

Surveyors said that house prices continued to fall during January, but noted that the net price balance had now improved for three months in a row to stand at its best level since July last year.

Across the UK, all regions continued to record price falls, with the East Midlands and Yorkshire and Humberside suffering the most.

Values dropped the least in London, but, more significantly, price expectations in the capital actually turned positive for the first time since the middle of 2010.

Despite the slow market, surveyors claimed to remain cautiously optimistic about future prospects.

"The key indicators of market activity remained in negative territory in January, albeit a little less so than in December," said Ian Perry, RICS spokesperson.

"Uncertainty over the prospects for employment, alongside the shortage of mortgage finance, particularly for first-time buyers, continues to weigh heavily on transaction levels.

"However, there is a very clear regional pattern emerging with London seeing a greater level of price resilience while in much of the North and Midlands, the market remains under greater pressure."

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