Interest continues to grow in SW housing market

March 9, 2009

Buyer interest continued to grow in February with interest in the South West up for the second consecutive month, says RICS’ UK housing market survey published this month.

Interest in the market remained strong for the fourth consecutive month. Nationally, 20 per cent more Chartered Surveyors reported a rise than a fall in new buyer enquiries (up from 15 per cent in January) and in the South West there was a seven percent increase.

Interest is strong in nearly every region with London and the south of England leading the way. In fact, interest in London reached levels not seen since October 2006. The rise in interest reflects both the drop in asking prices and continued interest rate cuts. As house prices fall, those with finance continue to look for bargain opportunities.

However, this pent up demand has not translated into sales. The average across the UK for the number of transactions per agency (over the last three months) is now at 9.5, a drop from 9.8 in November, and the lowest figure since the survey began in 1978. In the South West, this figure remained steady once again at nine sales, while London agents experienced the worst transaction levels with only six properties sold per agency over the past three months.

The number of surveyors reporting house price falls in the region increased in February with 89 per cent more Chartered Surveyors indicating a fall than rise in house prices, up from 67 per cent in January. This compares nationally to a continued increase with 78.3 per cent more Chartered Surveyors indicating a fall than rise in house prices in February, up from 76.6 per cent in January.

Despite depressing repossessions data, the net balance of surveyors reporting new instructions to sell remains in negative territory indicating that supply is very tight.  In the current market, a lack of mortgage finance and economic conditions are restricting the ability of many to consider the option of entering the market.  However, surveyors generally remain optimistic that sales will pick up in the coming months. Across the UK, 11 per cent more Chartered Surveyors expect sales to increase in the coming three months, though in the South West this figure fell by three per cent.

Roger Punch, RICS South West spokesperson, commented: “The South West is a prime example of the patchy housing picture we are seeing across the UK – with new buyer interest growing but uncertainty and cautiousness still very much apparent in the static sales levels. There are strong signs of emerging willingness for potential buyers to take part in the market with lower prices and falling interest rates making property more attractive than before.

“However, the number of properties coming on to the market is still very low, especially given how busy this time of year normally is for new instructions. This shows sellers are still playing a cautious waiting game whilst access to mortgages and falling prices dominates housing market concerns.”

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