RICS has reported that the continued lack of buyer demand and low supply levels is causing the housing market to remain sluggish. The January Housing Market Survey shows that seven per cent more surveyors reported demand for property had fallen rather than risen. RICS indicated that this was due to purchasers remaining cautious about the economy and the possibility of mortgage rate increases later in the year.
Almost a third of surveyors reported that house prices fell rather than rose in January, whilst this remains negative, the net price balance has now improved for the third month in succession, standing at its best level since July last year. London however is continuing to buck the trend in terms of price expectations and is the only region showing a positive price expectation over the next three months.
Newly agreed sales have continued to drop at a similar rate as the past three months with weakness in market activity reflected in actual sales transactions. Average sales per surveyor, in the three months to January, slipped back to 14.6, compared to 15.2 in December. This is the lowest figure since June 2009.
Surveyors say that they are remaining optimistic about future prospects despite the slow market.
Commenting, RICS spokesperson, Ian Perry, said:
“The key indicators of market activity remained in negative territory in January, albeit a little less so than in December. Uncertainty over the prospects for employment, alongside the shortage of mortgage finance particularly for first-time buyers continues to weigh heavily on transactions levels. However, there is a very clear regional pattern emerging with London seeing a greater level of price resilience while in much of the North and Midlands, the market remains under greater pressure.”
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