Fewer vendors put their homes up for sale during September, as fears over the economy continued to impact negatively on the housing market, says the latest RICS UK Housing Market survey published today, 11 October 2011.
New instructions, which indicate supply levels to the market, fell back during September, with five per cent more surveyors reporting supply of property fell rather than rose. Surveyors report fragile consumer confidence and continuing fears over the economy are causing many to think twice before putting their properties up for sale.
Despite this, new buyer enquiries actually increased marginally during September; with three per cent more chartered surveyors reporting an increase rather than decrease in demand (from -2 per cent). However, although surveyors note that more mortgage products are becoming available, the large deposits required by lenders continue to act as a barrier for many would-be buyers.
Stocks on surveyors’ books rose slightly during September to an average of 68.9 (from 66.9). Meanwhile, the number of sales per surveyor over the three months to August also increased fractionally, from 14.1 to an average of 14.5 (on a seasonally adjusted basis). Althoughthe sales market remains challenging, respondents report that sales are still taking place on realistically priced properties.
The house price balance remained unchanged during September, with 23 per cent more surveyors still reporting prices fell rather than rose. Price expectations also remained unmoved from August; with a net balance of 23 per cent anticipating prices will decline rather than rise over the next three months. Every part of the UK, including London, recorded some degree of negative price expectations during September.
Only sales expectations continued to be positive for the coming months (+12 per cent), although they fell back from the previous month’s reading (+16). Surveyors predict investors in some parts of the UK will now begin to return to bricks and mortar as a haven from the turbulent financial markets.
Commenting, RICS housing spokesperson, Michael Newey (left), said, “Falling supply of fresh stock is indicative of general fears overhanging the economy, with many potential sellers preferring to stay put for now. As a result, the UK housing market remains pretty flat with activity level generally subdued. Although it is hard to see what will give the market a lift in the near term, the announcement of a further raft of quantitative easing from the Bank of England will help to at least keep mortgage rates down. This, if nothing else, should ease the pressure on existing homeowners and limit the risk of a material pick-up in repossessions."
RICS housing market survey is the longest running monthly survey of house prices in the UK, collecting data since January 1978. The survey is cited by the Bank of England's monetary policy committee at its monthly interest rate setting meetings. Click here to see it.