Enquiries and newly agreed sales continue to pick up in the East of England

RICS UK housing market survey, April 2009

Newly agreed residential sales edged up a little further in the East of England in April, albeit from historically low levels, while the net balance of surveyors reporting a rise in new buyer enquires climbed to the highest figure for almost a decade, according to the RICS’ UK housing market survey published today (12 May 2009).

New enquiries in the market increased again in the East of England in April. 71 per cent more Chartered Surveyors in the region reported a rise rather than a fall in new buyer enquiries up from 37 per cent in March and the highest figure for almost a decade. This interest in the regional residential market is well above the national average. 41 per cent of Chartered Surveyors across the country reported a rise rather than a fall in new buyer enquiries in April.

Some of this interest is translating into sales across the UK but transactions in the East of England remain low and unchanged in April. Surveyors in the region sold an average of 10 properties over the past three months, the same as in March. This is now slightly below the national average of 10.6 property sales over the past three months, up from 9.7 in March.

The balance of newly agreed sales continued to rise in the East of England. 42 per cent more chartered surveyors reported a rise rather than a fall in newly agreed sales, up from 30 per cent. Surveyors in most regions now expect this trend to continue. This is the first time that surveyors have been universally optimistic about sales since August 2006.

It is also noteworthy that the sales to stock ratio – widely viewed as a key gauge of market slack - has risen for the fourth consecutive month indicating that some stabilisation in prices may occur later in the year. The net balance of surveyors reporting house price falls in the East of England eased slightly again. 72 per cent more Chartered Surveyors reported a fall rather than rise in house prices, from 80 per cent in March.

Despite a deteriorating employment picture, the net balance of surveyors reporting new instructions to sell has fallen dramatically in the East of England and is now back in negative territory, indicating that supply is still very tight. 69 per cent more Chartered Surveyors in the region reported that new instructions to sell had fallen rather than risen in April, compared to March when 36 per cent of the region’s surveyors reported new instructions had risen rather than fallen. Falling prices and subdued activity may still be discouraging potential vendors from putting property on the market. Meanwhile low interest rates are limiting the amount of forced sales.

RICS East operations director, David Potter said: “There are tentative signs that the market is starting to pick up but transactions remain at very low levels and we are unlikely to see significant improvement while money remains in short supply and the employment picture is uncertain.

“Transaction levels could benefit from an increase in supply but falling prices and low interest rates are discouraging sellers as is the latest change in HIPS legislation. House prices could stabilise in the coming months but prospective purchasers – and first-time buyers particularly – will continue to encounter challenges while banks maintain current loan to value ratios and make accessibility difficult even for those who have accumulated considerable equity in their existing properties.”

David Sherwood MRICS, of Fenn Wright, Essex, said: “The lack of availability of mortgage finance is definitely restricting the ability of buyers who are keen to buy now as it is perceived that we are close to the bottom of the market.”

John Pocock FRICS, of Pocock and Shaw, Cambridge, said: “We now seem to be well beyond the point where prospective buyers have held back for gear of further price falls in the future. There is some evidence that a limited number of houses are now fetching a little more than might have been possible three months ago. The increasing demand we are experiencing, however, is not being met by the supply of houses available. This imbalance might lead to a rise in prices but after what has happened over the last 18 months, the public may well prevent it.”

David Knights MRICS, of David Brown, Suffolk, said: “There are positive signs of more activity in the market and there are more serious purchasers about. However, the new HIP guidelines have served only to reduce the number of properties coming onto the market.”

Faisal Oshodi MRICS, of Russen and Turner, Norfolk, said: “Confidence has yet to fully return to the market. We’ve seen a slight increase in speculative enquiries. Rising sales completions have tended to follow dramatic reductions in asking prices.”

Source: RICS