Buyers returning but stock is down

Tuesday, 9 June 2009 9:17 AM

Buyer enquiries are up but stock is down according to a housing market survey out today.

The Royal Institution of Chartered Surveyors (Rics) show new buyer enquires increased at a faster rate in May, but the number of properties on estate agents' books is down by more than a third compared to a year ago.

The higher level of buyers is also starting to feed through to more sales - although still at a very depressed level.

But the level of new instructions to sell has now fallen for every month over the last two years - with Rics stating the recent drop was due to the introduction of Home Information Packs (Hips).

The Rics data also point to house prices remaining depressed.

Some 42 per cent of surveyors polled said prices were dropping and 52 per cent said they were static. However, the number of Rics members seeing prices hold steady has risen.

Across the UK, most positivity for rising house prices were seen in London, the south-west and Scotland.

Price drops were noted mostly in the north and the West Midlands.

Rics spokesperson Ian Perry said: "On the face of it, the housing market does appear to be close to bottoming out with activity picking up in a material way and prices at last stabilising.

"However it is important to remember that the lack of supply has been as important in underpinning prices as the rise in demand."

He added: "Moreover, with the economic backdrop still quite uncertain, unemployment is set to continue increasing sharply and finance for first time buyers is still in short supply, there are a number of significant obstacles for the market to overcome over the coming months."

Luke Pender-Cudlip, from London-based Knight Frank, said there was a sense the market was now turning a corner.

"April and May have been significantly more productive than previous months," he said.

"Buyers are more committed and are prepared to make decisions. We sense that there is a general acceptance that prices have bottomed out and now is the time to buy.

"Vendors, on the other hand, are still cautious about marketing and concerns about prices."

John Pocock, at Cambridge-based Pocock & Shaw, reports buyers competing over properties.

"The change has been dramatic. Very little is coming onto the market while the demand increases by the week," he said.

"For most houses, the selling prospects are now very good and for some, there are multiple buyers competing. Properties showing no sign of finding a buyer three months ago are now selling and the stock of available property is much reduced.

"A complete reverse within a four-month period."

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