The UK housing market
remained flat during March. Low sales levels and falling demand were
apparent, with regional divergences widening, says the latest RICS UK
Housing Market survey (12 April 2011).
Demand for property
experienced a slight downturn last month, with six per cent more
surveyors reporting a fall rather than a rise in new buyer enquiries
(from -1 in February).
Caution about the
overall outlook for the economy and the prospect of future interest
rate hikes are compounding the difficulties over access to mortgage
finance for many first time buyers.
Despite this negative
reading nationally, strong regional variations were evident. Large
parts of the Midlands and the North of England saw buyer interest
drop considerably, while surveyors in areas such as Scotland, Wales
and the South East reported a steady increase. Meanwhile, new
instructions, which indicate supply levels to the market, remained
steady; with four per cent more surveyors reporting instructions rose
rather than fell during March. Newly agreed sales – a good
indicator of market activity – registered a flat reading
nationally, with a net balance of +1.
However, the regional
picture again showed considerable variation. Transaction levels were
most positive in the South West and Wales, while the East Midlands
and Yorkshire and Humberside experienced particularly negative
readings. Surveyors report that the reluctance of vendors to further
lower their price remains a stumbling block to many would-be buyers.
Nationally, 23 per cent
more chartered surveyors reported a fall rather than a rise in
property prices (from 26 per cent more in February). However, the
majority of respondents recording price falls did so in the 0-2 per
cent price range. London was the only area of the country to report a
rise in prices, demonstrating that the Capital is still operating
under different market conditions to the rest of the country.
Alongside this, price
expectations for the next three months remained downbeat, with 24 per
cent more surveyors predicting prices will fall rather than rise.
While representing a slight improvement from February’s net balance
of 28 per cent more, this reading has now remained negative for ten
consecutive months. Looking ahead, five per cent more surveyors
expected sales to increase rather than decrease, suggesting that
there is some hope that activity may edge upwards over the coming
spokesperson Ian Perry said, “The rather negative outlook for
property prices across the UK seems to better reflect the general
economy than the micro climate of London. The low level of buyer
interest in many parts of the UK continues to impact on the market,
resulting in some downward pressure on prices.
“With the prospect of
forthcoming interest rate rises and continued shortage of mortgage
funding, it seems that overall recovery for the national housing
market is still some way off.”
RICS UK Housing Market
Survey March 2011
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