In March, chartered surveyors reported selling an average of 17.4 homes over the previous three months, the highest number since March 2010. Confidence has been slowly returning to the UK housing market since the end of 2012 and transactions have also risen for three consecutive months.
This increasing stability was mirrored by prices as respondents across the country reported practically no movement during March. A net balance of just one percent more surveyors reported price falls (from -7%), meaning house prices across the UK have now been relatively stable for six months.
Moving on to demand, an increasing number of prospective buyers got out and viewed property during March. A net balance of 11% more surveyors reported rises in new buyer enquiries, the highest reading since October. It seems that government’s recent efforts to encourage banks to offer more affordable mortgages may now be starting the bear fruit and assist purchasers.
Meanwhile, the amount of homes coming onto the market was little changed last month. Two percent more surveyors reported rises rather than falls in new instructions, meaning that the shortfall of fresh stock coming to the market remains a key issue for buyers.
At a regional level, the survey suggests that, on average, surveyors in the West Midlands have seen the biggest increase in homes sold since the start of the year, followed by those working in the London area. By way of contrast, the sales trend appears flattest in East Anglia and the East Midlands.
Looking ahead, respondents are optimistic that the recent increase in transactions is set to continue. A net balance of 19% more surveyors expect sales to rise further over the coming three months. Moreover, price expectations indicators for both the next three and twelve months have been in positive territory for the last four months.
A buoyant, healthy property market is central to economic recovery and, while these are still very much early signs, it is encouraging that sales are beginning to pick-up. The increase in potential buyers getting out there and viewing property is particularly encouraging. Thanks to initiatives such as Funding for Lending, mortgages are becoming more accessible to buyers, which is gently easing the pressure on the market and freeing up stagnant chains.
Andy Knee, Chief Executive of LMS, comments:
“The latest figures from RICS show that, despite the year getting off to a relatively slow start, there has been a significant increase in the number of new buyer enquiries during March. Undoubtedly it is the current competitive rates that are enticing new customers into the market.
“Once again the London market is out-performing the rest of the country in terms of house prices.”
Brian Murphy, head of lending, comments:
“The three-year high in housing market activity is certainly welcome news from RICS. It is a major plus to see transaction levels on the rise, and three consecutive months with more new sales agreed add up to a momentum that should grow as the Help To Buy scheme strengthens the market.
“Still, with all the expectations of Help To Buy, let’s not forget the Funding for Lending Scheme still has nearly ten months to run. We know George Osborne has been talking with the Bank of England about extending the scheme, and no-one wants activity to decline as people wait for the new mortgage guarantees to arrive next year.
“Average fixed rates have fallen by more than 0.5% under the FLS, but the average purchase loan to value has barely shifted and cheaper funding has been monopolised by borrowers with hefty deposits. Although the medium term outlook is positive, it is imperative we do not forget those other potential buyers who have designs on moving this year.”
