Housing market interest rises

Tuesday 12th May 2009

People looking to buy a new home are returning to the market in their greatest numbers for nearly a decade, new research shows.

The Royal Institute of Chartered Surveyors (Rics) found 41 per cent of surveyors reported a rise rather than a fall in new buyer enquiries in April, with agreed sales also picking up slightly.

There was good news for house prices too, according to the Rics survey, which discovered just 59.9 per cent of surveyors were seeing a fall rather than a rise in house prices, down considerably from 72.1 per cent in March.

Rics spokesperson Jeremy Leaf 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."

Sales of homes remain at historically low levels, although they did pick up a little in April, up from 9.7 properties sold over the last three months per surveyor, to 10.6.

James Hyman, partner for residential sales at Cluttons, added: "Today's Rics figures confirm that buyers are back in the market.

"However, a shortage of property prevails and sellers should take this opportunity to market their properties to buyers who are taking advantage of low interest rates. Heightened competition for quality properties is resulting in faster sales and a stabilisation of prices."

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