- Sales to stock ratio edges up in August
- Close to two thirds of respondents report unchanged prices
- New buyer enquiries dip for fourth successive month
The closely-watched net price balance was slightly less negative with a reading of -19 compared to -23 in July.
Meanwhile the proportion of respondents to the survey suggesting that prices were unchanged (in the three months to August) edged up from 61% to 62%. Alongside this, the sales to stock ratio rose slightly from July but has effectively shown little change since the spring; the ratio is down on where it was earlier in the year but above the reading recorded in the comparable period of 2011. These series together, point to a broadly flat trend in prices at a national level. However, this inevitably masks significant regional variations.
The only part of the country where the RICS net price balance is in positive territory is London and this has pretty much been the case since the beginning of last year. This chimes with Land Registry figures showing London house prices to have climbed by more than 6% over the past twelve months. Key activity indicators from the Housing Market Survey suggest that the more sluggish picture on sales is continuing with new buyer enquiries edging lower for the fourth consecutive month and new instructions unchanged; the latter series has been either negative or flat in each of the last six months. These results are broadly consistent with HMRC figures which show residential transactions have slipped from on average 82k in the first three months of the year to an average of 75k in the three months to July.
The agreed sales series did edge upwards in August for the first time since March but only did so in a modest way and on in its own is not a strong enough signal to point to a reversal in the activity trend. That said, it is still too early to judge the impact of the recently introduced Funding for Lending scheme which has the potential to both lower borrowing costs and increase access to mortgage finance.
The forward looking indicators for sales (over both a three and twelve month period) suggest that respondents to the survey are indeed hopeful that a combination of a more stable economy and an improvement in the funding climate will help support activity. Interestingly, this appears to be a uniform message across the country. However, there is a little more caution on the price picture with London continuing to be the only region where further increases are anticipated over both the near and medium term. Prices are generally expected to be pretty stable across the rest of the South East over the next year.
