The weaker trend in prices is being driven by increasing new vendor instructions (supply) and falling new buyer enquiries (demand). Indeed, the new instructions balance increased from +28 to +33, the highest reading since May 2007.
Anecdotal evidence from surveyors suggests the rise in new instructions is primarily related to homeowners testing the market following the abolishment of HIPs in late May, rather than due to distressed selling.
Meanwhile, the new buyer enquiries balance fell for the second consecutive month from -6 to –10. Transaction levels remained more or less unchanged with the agreed sales balance edging down from +3 to +1.
The average number of properties on surveyor’s books rose by 4.1% on the month to 69.1. At the same time, the average number of sales per surveyor remained essentially flat at 16.6 (down 0.1% on the month). As a result, the sales to stock ratio – an indicator of market slack- fell to 24%, the lowest level since June 2009.
Given the amount of slack in the market, it is not surprising that price expectations turned more negative, with the balance falling from -6 to -28. Sales expectations remain positive overall, but surveyors turned less optimistic than last month, with the balance slipping from +17 to +8.
In terms the regional picture, more surveyors are still reporting price increases than decreases in London and the North West. The picture is stable in Scotland and the South West. Elsewhere, including Northern Ireland, more surveyors are seeing price falls.
