The UK housing market should see a slightly stronger end to the year with transaction levels expected to pick up and price falls predicted to slow, says the latest RICS UK housing market survey.
Helped by the prospect of greater mortgage availability on the back of recent government initiatives, chartered surveyors’ expectations for future sales have reached their highest level since May 2010. During September, a net balance of 26% more respondents predicted transactions to grow during the final three months of the year.
This cautious optimism was also reflected in surveyors’ price predictions, with 9% more respondents expecting prices to fall over the coming three months. While still in negative territory, this is the most positive reading since the time of the expiry of the stamp duty holiday in March this year.
Last month, prices in the UK housing market continued to fall, albeit at a slower pace than in previous months. A net balance of 15% more surveyors reported falls rather than rises, also the best reading since the spring.
Elsewhere, demand from potential buyers remained stable in most parts of the country, with 4% more surveyors across the UK seeing increases rather than decreases in new buyer enquiries. Interest from would-be buyers has not seen any significant growth since the end of 2009.
A rise in the number of house sales would have substantial benefits to plumbers, heating engineers and the construction industry as a whole, as property purchases are often followed by homeowner investments such as new kitchens, bathrooms and extensions.
The amount of homes coming onto the market during September remained fairly flat, as just 5% more respondents claimed that supply had risen rather than fallen. A persisting theme of the housing market in recent months seems to be that transactions are going through where vendors are realistic in their price expectations.
Peter Bolton King, RICS global residential director, said: "The housing market was relatively flat during September but surveyors are optimistic that the run in to Christmas could see an increase in activity in many areas of the country. Prices are still dipping but at a much lower rate than seen in previous months.
“Despite this, problems still exist and more needs to be done to get the market moving. Unrealistic expectations on the part of vendors seem to be stalling the transaction process. Meanwhile, although the funding for lending scheme appears to be improving mortgage availability, those at the very bottom of the housing ladder are still struggling.”
The RICS housing market survey is the longest running monthly survey of house prices in the UK, collecting data since January 1978. The survey is cited by the Bank of England's monetary policy committee at its monthly interest rate setting meetings.