Chink of light in SW housing market

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The average number of house transactions per surveyor nationally fell to yet another record low in January despite buyer interest rising for the third successive month, says RICS’ UK housing market survey published today.

The average number of transactions per agency (over the last three months) remained static at nine in the south west for a second month but there is some evidence that this may be improving during February. This is compared to an average of 9.9 across the UK, a drop from 10.1 in December, and the lowest figure since the survey began in 1978.

The balance of surveyors nationally reporting house price falls increased slightly in December with 76.3% more chartered surveyors indicating a fall than rise in house prices, an increase from 73.9% the previous month.  Here in the south west this increase was more pronounced, with 66% more reporting a fall than a rise – up 14% from last month.

The picture in other UK regions remained somewhat gloomy with chartered surveyors in London and Wales reporting only eight sales per agency over the last three months and nine in the south east.  Last month, the most buoyant region was the East Midlands with 15 sales per surveyor, however this figure has now fallen to 12.

Significantly, interest in the market continues to remain upbeat across the UK with 16% more chartered surveyors reporting a rise than a fall in new buyer enquiries. However, contrary to trend, in the south west this interest fell back and there was a 14% decrease in the number reporting a rise rather than a fall in enquires. As house prices fall, those with finance continue to look for bargain opportunities.
Interest is strongest in Wales while the balance in London continues to edge upwards.

Expectations that sales will increase have turned positive. Nationally, 10% more chartered surveyors expect sales to pick up in the coming month but expectations that house prices will increase remain firmly in negative territory. Optimism is most visible in London and across the south of England with the balance of surveyors expecting sales to increase in London rising from 18% to 38%.  In contrast chartered surveyors expect house prices to continue to decline in the near term.

Contrary to the survey findings, Roger Punch, Stags, Plymouth and RICS South West spokesperson has found the current market in his location to be somewhat different. he said: “Since the survey, we have seen a significant upturn in activity during early 2009 and sales are also starting to move in a more encouraging direction. This improving trend may not be true of everywhere within the region but evidence shows similar upturns can be seen as far as Bristol.

“This may not be the start of a rush but buyers who have been either sitting in rented accommodation, or are able to proceed without selling, are feeling that now is a good time to enter the market.

“Whilst prices in general may not have settled just yet, some are possibly at their lowest point and therefore buying a house now may be seen as a good idea. We have probably seen most of the price correction that will take place during 2008. A combination of mortgages becoming available at attractive rates and rental returns are making property an appealing investment. Significant price adjustments are now stimulating a quite different mood to that prevailing through much of 2008.”