Sales fall further despite interest in SW market, says RICS

January 19, 2009

The average number of housing transactions per surveyor fell to a record low in December despite buyer interest remaining strong says RICS’ UK housing market survey published recently.

The balance of surveyors nationally reporting house price falls fell back slightly in December with 73.5 per cent of Chartered Surveyors indicating a fall than rise in house prices, a decrease from 75.8 per cent in October. Here in the South West the improvement was more pronounced with 25 per cent less Chartered Surveyors reporting a fall than a rise in prices, down to 53 per cent from 78 per cent in November.

The number of sales slipped further across the UK during the traditionally quiet Christmas period. The average number of transactions per agency (over the last three months) is now at 10.1, a drop from 10.6 in November (the lowest figure since the survey began in 1978) and fell below this average to 9 in the South West.

Significantly, interest in the market continues to remain upbeat. 17 per cent more Chartered Surveyors reported a rise than a fall in new buyer enquiries nationally – up from 16 per cent in November. The South West continued to see a rise in interest but confidence in sales expectations slipped back in December by 9 per cent, from 24 per cent the previous month to 15 per cent.

As house prices fall, those with finance continue to look for bargain opportunities. Interest is strongest in the South West and East Anglia while the balance in London turned positive for the first time since 2006. The rise in interest reflects both the drop in asking prices and recent cuts in interest rates to an all-time low.

3 per cent more Chartered Surveyors reported a fall than a rise in new instructions to sell property up from a zero net balance in November. Supply is starting to loosen in most regions but remains tight in London and the East Midlands.

Tim Maggs, RICS South West spokesperson and managing partner at Maggs & Allen Estate Agents in Bristol commentedt: “Buyer interest is now at levels not seen since 2006 but without mortgage finance the housing market is at a standstill with transaction levels at an all time low. First-time buyers and owner-occupiers are now stuck in a market which does not fulfil their aspirations. The government must act now to ensure that order is restored to the current chaos.

“A first step would be for the government to ensure that the supply of new mortgage finance is restored.  Without this help there is a real danger that homebuyers will be frozen out of the market, transaction levels and prices will fall to new lows, repossessions will increase and negative equity will become common place. Without this much-needed boost, the country could fall into a deeper recession.”

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