However, the headline net price balance while still negative, improved for the second consecutive month, edging up from –44 to –39 i.e. 39% more surveyors saw prices fall rather than rise.
New buyer enquiries (demand) continued to fall in December, although at a slower pace. Meanwhile, new vendor instructions (supply) declined at a quicker rate than the previous month, with the net balance falling from –4 to –14, the lowest reading in over 18 months.
Newly agreed sales continued to decline, with the net balance edging down from -14 to –15. Anecdotal evidence from surveyors suggests that lacklustre activity levels are related to the heavy snowfall during the month.
Transaction levels, although low, are showing some signs of stabilising with average sales per surveyor edging up slightly in December (up by 2.6% to 15.2). Nevertheless, they remain well below their long run average (27 since 1994).
Additionally, the average number of properties on surveyors’ books increased by 1.8% on the month to 70.8. Due to both sales and stocks rising by roughly similar amounts during the month, the sales to stock ratio remained largely unchanged (it edged up fractionally from 21.3% to 21.5%).
This sales to stock reading suggests there is still considerably more slack in the market than average (34%).
Looking forward, surveyors remain on balance moderately optimistic about sales, with the sales expectations net balance rising from 6 to 8. Meanwhile, price expectations remained negative, but less so than last month (the net balance improved from –41 to –29).
The regional price picture shows that all regions in the survey recorded negative net price balances in December. Within England, the West Midlands and Yorkshire & Humberside recorded the weakest figures of –66 and –55 respectively, whilst London showed the least negative at –18.
Elsewhere, Scotland had a net price balance of –16 whilst the Northern Ireland reading was –49 (not seasonally adjusted).
Commenting, RICS spokesperson, Jeremy Leaf, said:
"Although bad weather hit the housing market during December sales levels have remained stable. While lack of supply, and more importantly demand continues to impact heavily, surveyor sentiment does appear more positive for the coming months.
"The key issue now is mortgage finance. However, with commentators suggesting lending constraints are unlikely to be eased, it is hard to envisage a meaningful increase in sales levels in the near term."
