Buyer interest continued to increase during the month allbeit at pretty much the same pace as in April; the new enquiries net balance edged up from +9 to +10. More significantly, the abolition of HIPs has resulted in a sharp increase in new instructions, with the net balance jumping from +11 to +21. This trend is likely to persist in the near term.
Indeed, in response to a specific additional question 73% of surveyors said that they expected the decision on HIPs to lead to a higher level of new vendor instructions with the increase in supply anticipated to be around 15%.
Surveyors turned slightly more optimistic on the sales outlook (with the net balance rising from +27 to +31). However, the price expectations net balance fell back slightly from +7 to +5. The average stock of property on surveyors’ books was unchanged on the month at 61.6 per surveyor.
Meanwhile, the average number of completed sales fell by 4.8% on the month to 16.6 per surveyor. This had the effect of pushing down the sales to stock ratio, a key indicator of market slack, from 28% to 27%.
In terms of the regional picture, London and the South East continued to outperform on the price trend. They were followed by the North and North West, which saw strong rebounds in their respective net price balances.
Surveyors reported modest price falls in Wales, Yorkshire and Humberside and the West Midlands. In Scotland, surveyors reported slight price increases and in Northern Ireland, they reported moderate price falls.
Commenting, RICS spokesperson, Ian Perry said:
“Surveyors are generally confident that sales will continue to pick up over the summer months. The increase in supply as a result of the the abolition of HIPs is helping to support this optimism despite continuing concerns about mortgage finance.
"A higher level of instructions should meanwhile also lead to a flatter trend in house prices in the latter part of the year.”
Peter Bolton King, Chief Executive of the National Association of Estate Agents, comments:
"We have been saying for some time that the end of HIPs would provide a boost to the housing market and provide a further incentive for people to move. Indeed some potential sellers may have held back in May to wait until the decision on HIPs was made and will now come in to the market during June.
“Whilst house prices may dip in certain areas as additional properties come onto the market, in other areas, any increase in supply would still not be enough to meet the current demand. In those areas of high demand where supply does increase, we might see a stabilisation in the rising prices of recent months.”
