Chartered surveyors are predicting a rise in house prices for the first time in 18 months.
The Royal Institution of Chartered Surveyors latest housing market survey, reveals that the number of chartered surveyors reporting price falls for September dropped again, to 21%, down from 25% in August.
Though the increase in buyer interest is modest, it points to a gradual rise in demand, helped by August’s interest rate cut. New buyer enquiries for September show a further increase, up for the fourth consecutive month.
Buyers continue to maintain their upper hand in the market as levels of unsold property remain high, giving buyers more choice and room to negotiate on prices
However, increasing demand and a possibility of further interest rate cuts have led surveyors to expect house prices to rise marginally by the end of the year. This turnaround in confidence adds to the evidence pointing to a stabilising of the market.
After declining since mid 2004, London’s house prices are now static. Elsewhere price falls have slowed, most notably in East Anglia and the North, with prices in Scotland continuing to rise. The pace of price falls increased slightly in the South East and Wales, while the North West saw renewed declines after two months of stability.
Ian Perry, spokesperson for RICS housing, says: While sellers asking for unrealistic prices are still struggling to find potential buyers, they are beginning to feel more confident as fears of a sharp fall in house prices have largely dissipated. The amount of new property coming onto the market fell in September for the first time in one and a half years.
The upturn in demand and improved outlook on interest rates has led surveyors to predict house price rises for the first time since early 2004, though these are expected to be small. RICS expects the recovery in activity to be sustained due to continued expansion in employment, which bodes well for a stable housing market.”
This week, RICS will publish its views on the potential impact of Self Invested Pension Plan on the UK residential market.