RICS UK housing market survey, January 2009
The average number of transactions for surveyors in the East of England has risen over the last three months, but new buyer enquiries have fallen back again during the past month which could impact on future sales, according to the RICS’ UK housing market survey published today (10 February 2009).
The average number of transactions per agency (over the last three months) is now at twelve, an increase from ten in December. The balance of surveyors reporting house price falls increased in December with 88 per cent more Chartered Surveyors indicating a fall than a rise in house prices, compared to 72 per cent the previous month.
Significantly, interest in the market has dropped back into negative territory with four per cent of Chartered Surveyors reporting a fall than a rise in new buyer enquiries, compared to 46 reporting a rise than a fall in December. This is likely to have an impact on sales over the coming months.
In addition, the number of new instructions to sell homes fell dramatically in January from a positive to a negative. 84 per cent more Chartered Surveyors reported a fall than a rise in instructions to sell property, compared to a balance of five per cent reporting a rise than a fall in December. It would seem that despite the cut in interest rates and dropping house prices, people in the East of England are still not committing to selling or buying property in the current economic climate.
Despite these falls sales expectations have turned positive again with 10 per cent more Chartered Surveyors expecting sales to pick up over the next three months rather than fall. Optimism is most visible in London and across the South of England with the balance of surveyors expecting sales to increase in London rising from 18 per cent to 38 per cent. In contrast, Chartered Surveyors expect house prices to continue to decline in the near term.
RICS East operations director, David Potter said: “The latest survey provides further evidence of the eagerness of buyers to try and pick up bargains. 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.”
Anthony Bromley-Martin, of Strutt and Parker, Essex, said: “The general belief is that values will bottom out at the end of this year. For purchasers to buy this year they will need to achieve a bargain in order to be sure that values will not drop below the level at which they buy. Job security and general confidence in the wider situation is still a factor affecting people’s ability to buy.” John Pocock, of Pocock and Shaw, Cambridge, said: “The number of viewings has increased over the pre-Christmas period so it is clear that far more people are now seriously considering whether to come back into the market. Hopefully this will translate into increased offers and sales, but the lack of property coming onto the market at present is a worrying factor.“ Andrew Wagstaff, of Bedfords, Norfolk, said: “There is evidence that investors are returning to the market, but there is also a shortage of instructions as existing owners who are not forced into selling see no advantage in doing so in a depressed market. There is a danger that a stalemate may arise.”