Page last updated at 09:49 GMT, Wednesday, 15 April 2009 10:49 UK

Surveyors report market momentum

Sale signs
The housing market has slumped in the last year

Interest from home-buyers is starting to gain "real momentum", although sales remain low, UK surveyors say.

New inquiries in the housing market increased for the fifth consecutive month in March, the Royal Institution of Chartered Surveyors (Rics) found.

However, it said surveyors had still been selling on average fewer than 10 homes each over the past three months.

There was increased optimism that sales would pick up during the year, but it remained tough for first-time buyers.

"Buyer interest is starting to gain real momentum, but will remain frustrated while mortgage finance is scarce," said Rics spokesman Ian Perry.

"The market is still in a fragile state, but with demand continuing to pick up, there may be more signs of stabilisation in the coming months."

The government's own house price figures painted a more gloomy picture, with the decline of UK average property values gaining pace, although the figures lag behind the Rics survey.

Price expectations

The majority of surveyors reported that prices were falling in March, although the proportion eased compared with previous months.

Those with cash in the bank on close to nil returns are considering and often actually moving back into the property market
Surveyor David Richardson

But 31% of surveyors reported a rise in new inquiries from buyers - strongest in London, but weakest in the South East of England. That is the fifth consecutive monthly rise and many expected this to be feeding through to actual sales.

However, completed property sales were still down 53% in March compared with a year ago.

The average stock of unsold property fell in March compared with February, the survey found.

'Optimism'

Surveyors have been among the most optimistic when predicting the turn in the market, and have been reporting interest in property from people who are failing to get much interest from other investments.

NATIONAL HOUSE PRICE FALLS
Northern Ireland: 19.4%
Wales: 12.5%
England: 12.4%
Scotland: 8.6%
Source: Department of Communities and Local Government

Surveyor David Richardson, from Norfolk, said: "Those with cash in the bank on close to nil returns are considering and often actually moving back into the property market."

Martin Pendered, of Northamptonshire, reported "significant numbers of viewings", but that it remained difficult to persuade buyers to commit to buying a home.

The survey backs up the latest home loan figures from the Council of Mortgage Lenders (CML), which suggested that the number of mortgages handed out was rising.

Both groups said it remained tough for first-time buyers, with the CML claiming they typically needed to provide a record deposit level of 25% in February.

Flat sales down

The government's own figures on house prices showed that the rate of decline gained pace at the start of the year.

House keys
The government's own figures painted a more gloomy picture

The average UK property price fell by 4.8% in the three months ending in February, compared with a drop of 4.3% in the previous quarter, according to the Department of Communities and Local Government.

Prices in February were 12.3% lower than a year earlier and 2.7% down on January, at an average of £189,813.

The numbers did provide a crumb of comfort for first-time buyers, who found that the price they were paying for their first home in February was 15.1% lower than a year earlier.

The sharpest annual fall in house prices was in Northern Ireland (19.4%), followed by Wales (12.5%), England (12.4%) and Scotland (8.6%).

In England, prices dropped slowest in the North East (10.3%), with the fastest fall in the South East (13.3%).

Prices of flats fell the most from January to February, by 4.5%, compared with a 1.8% average price fall of semi-detached houses.



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