Page last updated at 11:00 GMT, Tuesday, 17 February 2009

Home sales may rise say surveyors

people outside an estate agent"s window in London
The market may pick up, though not for long, Rics suggests

Property sales may pick up in the next few months, according to a survey from the Royal Institution of Chartered Surveyors (Rics).

It said lower house prices had prompted renewed interest from potential buyers, especially those who already own a house or flat.

However, first-time buyers were still largely locked out of the market.

House prices fell by 10% in 2008 in the UK, according to the government's own house price survey.

The figures from the Department for Communities and Local Government (DCLG) showed that the average UK house price had fallen to 195,317 by December, a drop of 22,690 over the year.

Rics said it expected the pick up in interest from buyers to continue as prices decline.

"Interest from owner-occupiers is likely to persist over the comings months as those with large deposits look to capitalise on the drop in house prices," said Simon Rubinsohn, Rics chief economist.

Lower prices

Prices have dropped by about 20% since their peak in the summer of 2007, according to surveys by the Halifax and the Nationwide.

By no means could this relatively small pick-up in transactions be seen as representing a move back to a more orderly housing market
Simon Rubinsohn, Rics

The DCLG survey showed that last year prices fell fastest in Northern Ireland, down 18%, with the smallest drop being in Scotland, down 6%.

In both England and Wales house prices dropped by 10%.

Rics asked its members what types of buyer had been showing interest, and what sort of home they were interested in.

It found that 71% of surveyors thought that low prices were the main factor attracting interest.

About three-quarters of surveyors thought that existing owner-occupiers were showing some interest, while just a quarter reported that first-time buyers were looking around.

And existing houses, rather than flats or newly-built properties, were the overwhelming focus of the interest being shown by these potential buyers.

Below average

Rics has detected a rise in new buyer enquiries in each of the last three of its regular monthly surveys.

It regards these findings as a good indicator of near-term tends among house buyers, pointing to an impending pick up in sales, which slumped by more than half last year.

Despite this, Rics warned that the market would still remain relatively subdued.

"Our suspicion is that this improvement in activity levels is likely to be sustained over the coming months; mortgage approvals could climb above 35,000 [per month] on the back of the higher level of buyer interest," said Mr Rubinsohn.

"However, this would still be well down on the high for the cycle as well as being significantly below the long run average.

"By no means could this relatively small pick-up in transactions be seen as representing a move back to a more orderly housing market," he warned.

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