RICS reports new blood entering the market

New buyer enquiries for August rose for a third consecutive month, at the fastest pace since early 2004 says the Royal Institution of Chartered Surveyors’ monthly housing market survey released today.

This is due to a boost in buyer interest fuelled by August’s interest rate cut. Completed property sales are also up, for the second month running, and have risen by 7.5% from a low in February.

House prices continued to fall in August, though at the slowest rate in a year. The number of chartered surveyors reporting price falls for August fell to 26%, down from 36% in July.

The number of properties brought onto the market rose at the slowest pace in over a year, as the pressure to sell diminished.

There are signs the market is stabilising and receding fears of a house price crash.

The slowdown in new instructions has led to a drop in the number of homes available for sale, though surveyors continue to report large stocks of property on their books.

London continues to maintain a positive outlook, with price rises also expected in the North and North West. Wales, Yorkshire and Humberside have a more optimistic outlook, though the South East and West Midlands have all seen a fall in surveyors’ confidence from last month.

Jeremy Leaf, housing market spokesman for RICS, says: “Sales are up by 7.5% since February, indicating a return of confidence to the market.

“The pace of decline in house price falls is at its lowest in a year,also pointing to more stable conditions.

“The big question is whether the market is just stabilising or if this is the beginning of a sustained revival.

“August’s interest rate cut, together with continued employment rises, at new record levels, have helped improve the demand for housing after a difficult year for the industry.

“However, affordability has not improved significantly for most would-be buyers, and a return to rapid prices rises is not on the cards.”