House buyers more enthusiastic

Published: February 17, 2009

House buyers in the United Kingdom are becoming more enthusiastic according to the Royal Institute of Chartered Surveyors (RICS). In a statement released today, RICS confirmed that their record of new buyer enquiries in the housing market has shown its third consecutive monthly increase. This hasn't happened since late 2006 and gives some hope that activity at least will begin to return to the housing market.

RICS have stated that in the past, this data has been fairly reliable in predicting future movements in the numbers of mortgage loans approved, and therefore, they are not surprised that the mortgage approvals data in December showed a small gain. RICS are hoping that the current level of month on month improvement continues, and that the increase in those actively looking will lead to higher levels of mortgage approvals and housing market transactions in the coming months. However, RICS does urge caution, and their statement reminds us that these are relatively modest gains, and the level of activity remains still well below the average.

RICS recognises that the availability of mortgage finance will be crucial to maintaining the gains made over the last three months, but fear this may not be easy to achieve. Whilst mortgage lenders are more than happy to consider applications from home movers who still have large amounts of equity, the same deals are not available to first time buyers unless they have a significant deposit to put down. Until lenders start to offer competitively priced mortgages to those who have smaller deposits, the first time buyers will by and large stay away. We cannot expect there to be any real prospect of a return to normality until they return.