More buyer enquiries may help sales

The Royal Institute of Chartered Surveyors (RICS) has today released the results of its Housing Market Survey for January. Whilst the majority of the results suggested that the housing market remains stagnant, there one or two encouraging signs. RICS have reported that new buyer enquiries have increased for the third month in a row, suggesting that those buyers who are able to secure finance are actively out and about viewing properties.

The number of surveyors that are still reporting falling prices has increased marginally, with RICS suggesting that one of the principle factors in depressing prices is still the large stock of property on estate agents books relative to the pool of able buyers. The number of buyers in the market has been marginally assisted over recent months by the reduction in the Bank of England base rate and the reduced costs or mortgage loan to those who have large deposits. However, until lenders feel able to offer reasonably priced loans to those who have smaller deposits, the flow of buyers to the market will remain a trickle.

RICS went on to report that stock levels on surveyors books had fallen slightly in January, continues downwards trend of the past year. It is thought that much of this reduction is down to sellers who have decided to rent their properties rather than hang on indefinitely waiting for a buyer. In total, stock levels are now down a tenth on the levels of a year ago, marking the first annual decline since October 2007. However, whilst stocks are lower, the ratio of sales to stocks has increased very slightly. This ratio is normally taken as an assessment of slack in the market, and an indicator of future price changes. On that basis, any increase is seen as good, especially as this is the first increase in the ratio since September 2007, albeit from a level which was the lowest for sixteen years.

The report concludes that most surveyors are more positive about future sales, although confidence is still below the long run average. However, many surveyors still believe that further falls in house prices are likely, which was a sentiment echoed in all areas except London and the North West. It remains to be seen whether any further falls attract more buyers to the market, or whether existing buyers become any more successful in securing finance.

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