10
Dec
Sales edge a little lower but buyer interest picks up
The average number of transactions per surveyor fell again in
November but buyer interest rose for the first time in over two
years, says RICS’ UK housing market survey published today (9
December 2008). The balance of surveyors reporting house price
falls fell back slightly in November with 76.5 percent more
Chartered Surveyors indicating a fall than rise in house prices, a
decrease from 81 percent in October. Meanwhile, the number of
transactions slipped further as lenders continued to keep a tight
grip on finance. The average number of transactions per agency
(over the last three months) is now at 10.6, a drop from 10.9 in
October, and the lowest figure since the survey began in 1978. The
regional picture remains equally depressed with Chartered Surveyors
in London reporting only seven sales per agency over the last three
months and surveyors in Wales and East Anglia reporting only nine
sales in the same period. Last month, the most buoyant region was
the North East but even this area has dropped from 16 sales to 14.
It is noteworthy, however, that the sales to stock ratio – an
indicator of market slack and a key guide of future price changes
– seems to be stabilising albeit at historically low levels.
In November, it edged up from 13.5 percent to 13.6 percent.
Significantly, interest in the market turned positive for the first
time since October 2006 while expectations that sales volumes will
pick up also remained positive - although surveyors are less
optimistic than in October. 14 percent more Chartered Surveyors
reported a rise than a fall in new buyer enquiries up from a
negative balance of minus nine. The biggest increase in interest
occurred in the West Midlands while the balance in the South West
also rose. The rise in interest reflects both the drop in asking
prices and recent cuts in interest rates. Demand is weakest in
London with some continuing to adopt a wait and see approach and
others entering the lettings market. The balance of Chartered
Surveyors expecting an upturn in sales over the next three months
remains in positive territory at nine percent, a drop from a more
optimistic 20 percent in October. 1 percent more Chartered
Surveyors reported a fall than a rise in new instructions to sell
property up from minus four in October. The biggest turnaround
occurred in the West Midlands and the South West but supply in most
other regions remains tight. Commenting, RICS spokesperson Jeremy
Leaf said: “Many are starting to see the current market as an
opportunity to purchase a previously unaffordable property despite
the worsening economic picture. But, unless people feel relatively
confident about their job prospects, they're unlikely to even try
to obtain mortgage finance unless of course trading down or seeking
to release capital. Vendors still have to accept the inevitable
fact that house prices are falling and re-price their property to
suit current market conditions.”