The Royal Institution of Chartered Surveyors UK Housing Market Survey for November shows house prices continue to fall but new buyer enquiries are improving for the seventh consecutive month and turned positive for the first time since October 2006.
The seasonally adjusted net balance of surveyors reporting falling rather than rising prices improved from 81.0 to 76.5 in November, the highest level since February 2008.
The main factor that is depressing prices is the large stock of property on estate agents’ books relative to the pool of able buyers rather than any surge in distressed selling.
New instructions to sell property continued to remain broadly stable.
However RICs says it is not insignificant that since May, the number of regions in the survey where new instructions have been rising has been trending upwards.
Meanwhile, completed sales per surveyor over the last three months fell fractionally from 10.9 to 10.6.
RICs says although underlying activity remains very weak, the turnaround in the enquiries balance indicates that some level buyer interest is returning to the market.
This can be partly explained by the sharp cuts in the base rate delivered in the months up to and including November, coupled with the already significant adjustment in house prices.
However, market conditions are still close to the loosest level since 1992.
In terms of the price and activity outlooks, the former improved very slightly, but this was still sufficient to take the headline balance to its highest level since February 2008.
Confidence in the sales outlook slipped back on the month, but it still remains positive.
Some retrenchment in the national sales expectations balance always seemed likely given the unusually sharp increase that took place in London and the South West during October.
Looking at the England and Wales data from a regional perspective, the price balance deteriorated further in East Midlands, the North and the South West.
It remained stable in London and the North West, and it improved elsewhere.
David Smith, senior partner at Dreweatt Neate estate agents, says: “There’s no doubt that people are starting to put their heads above the parapet but how many of them, in the current market, will actually go over the top?
“There’s a big difference between showing an interest
in property and actually buying property. Prices now look attractive but there is a lot of uncertainty.”