Page last updated at 09:51 GMT, Tuesday, 9 June 2009 10:51 UK

Interest in property 'up again'

For sale sign
Various surveys have suggested some stabilisation in the market

Rising interest from potential buyers coupled with falling numbers of sellers is stabilising UK house prices, according to surveyors.

New buyer inquiries increased for the seventh month in a row in May - at the fastest rate since 1999, said the Royal Institution of Chartered Surveyors.

But there were fewer sellers, continuing a trend of the last two years, the survey found.

The government's own figures reported a rise in prices from March to April.

Two surveys from prominent lenders recently reported an increase in house prices in May.


The Rics survey, which has been running since 1978, takes a snapshot of the degree of confidence in the market from surveyors and estate agents across the UK.

Anna Joyce
We were selling four or five houses a month at the start of this year, now it is more like 12
Anna Joyce, Turbervilles estate agents

They reported that average sales were at their highest level since August last year.

However, at 11.8 properties sold per surveyor in the last three months, this remained 31% down on the same period a year earlier.

Rics members again suggested a further increase in potential new buyers window-shopping for property, most notably in Scotland, London and the south-east of England.

Alongside this, there were fewer people asking agents to sell their homes in May, which was also bolstering house prices.

"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," said Rics spokesman Ian Perry.

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


Some 11% more surveyors were now expecting property prices to fall rather than rise, the survey found. In addition, 40% more were predicting sales to increase than fall.

[There are] definite signs of early recovery but we are hoping the usual summer seasonal downturn does not now occur
Ian Shaw, Lincolnshire estate agent

Yet, Mr Perry stressed that the troubled state of the economy could still constrain any housing market recovery.

"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," he said.

Some surveyors pointed to the seasonal nature of property sales.

"[There are] definite signs of early recovery but we are hoping the usual summer seasonal downturn does not now occur," said Ian Shaw, who operates in Lincolnshire.

On 4 June, a survey by the Halifax said that UK house prices rose by 2.6% in May compared with April but activity remained low in the market.

This came shortly after the Nationwide building society reported a 1.2% rise in prices in May compared with April - the second rise in three months.

Terraced homes

The latest house price figures released by the Department of Communities and Local Government lag slightly behind other housing market surveys.

Northern Ireland: 22.8%
England: 13.2%
Wales: 10.3%
Scotland: 8.6%
Source: DCLG

However, the statistics show that the average price of terraced homes in the UK increased by 2% in April compared with March.

This helped to push UK prices for all properties up by 1.1%, with the average cost of a home at £189,215. Over a three-month period - a less volatile measure of prices - price declines eased to 3% from 3.9% in the previous quarter.

Prices dropped by 13% in the 12 months to April, although there has been a marked difference in the different parts of the UK.

Average annual house prices dropped by 22.8% in Northern Ireland, 13.2% in England, 10.3% in Wales, and 8.6% in Scotland.

First-time buyers have witnessed bigger falls in prices than owner-occupiers.

In the English regions, values have fallen the most in the London and the least in the West Midlands, the figures showed.

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