Helped by the prospect of greater mortgage availability on the back of recent government initiatives, chartered surveyors’ expectations for future sales reached their highest level since May 2010. During September, a net balance of 26 percent more respondents predicted transactions to grow during the final three months of the year.
This cautious optimism was also reflected in surveyors’ price predictions with nine percent more respondents expecting prices to fall over the coming three months. While still in negative territory, this is the most positive reading since the time of the expiry of March’s stamp duty holiday.
Last month, prices in the UK housing market continued to fall, albeit at a slower pace than in previous months. A net balance of 15 percent more surveyors reported falls rather than rises, the best reading since the spring.
Elsewhere, demand from potential buyers remained stable in most parts of the country with four percent more surveyors across the UK seeing increases rather than decreases in new buyer enquiries. Interest from would be buyers has not seen any significant growth since the end of 2009.
The amount of homes coming onto the market during September remained fairly flat, as five percent more respondents claimed that supply had risen rather than fallen. A persisting theme of the housing market in recent months seems to be that transactions are going through where vendors are realistic in their price expectations.
Peter Bolton King, RICS Global Residential Director, commented:
“The housing market was relatively flat during September but surveyors are optimistic that the run in to Christmas could see an increase in activity in many areas of the country. Prices are still dipping but at a much lower rate than seen in previous months.
“Despite this, problems still exist and more needs to be done to get the market moving. Unrealistic expectations on the part of vendors seem to be stalling the transaction process. Meanwhile, although the funding for lending scheme appears to be improving mortgage availability, those at the very bottom of the housing ladder are still struggling.”
Andy Knee, Chief Executive of LMS, looks at the RICS September 2012 UK Housing Market Survey and compares it to the prospects for the remortgage market:
“The RICS Housing Market Survey, which was released this morning, says that although the housing market has remained relatively flat during September surveyors are optimistic that we will see an increase in activity in the run-up to Christmas, ending the year on a “positive note”.
“While the RICS Survey suggests people may be moving, the most recent LMS Remortgage Report highlights the fact that they are not remortgaging. Indeed, gross remortgage lending in August represented the lowest proportion of the market since 1999.
“However, we believe that borrowers are holding back and as they take advantage of the current very attractive 3% mortgage deals we will see a surge in remortgage activity, injecting much needed life back into the market.”
Peter Rollings, CEO of estate agent Marsh & Parsons, comments:
“London’s housing market is running in a completely different gear to the national market, which is still simply ticking over, given the economic potholes placed in its path. Credit conditions have been stiflingly tight this year, and those with substantial equity or deposits have been the primary drivers behind any improvement in house prices. With the greatest concentration of wealthier buyers in the capital, price growth has been largely limited to within the bounds of the M25.
“However, there are tentative signs that the mortgage market may be improving, and lenders expect Funding for Lending to help them boost credit availability in the final quarter of the year. It remains to be seen exactly how many would-be first-time buyers will directly benefit over the coming months, but if we see a consistent increase in the number of buyers able to leave the rented sector, we could see the housing market outside of London move out of neutral.”
