House hunters 'returning to market'

Potential buyers are continuing to return to the property market following steep house price falls and successive interest rate cuts, research showed today.

The Royal Institution of Chartered Surveyors said buyer inquiries rose for the third month in a row during January, with 16 per cent more surveyors reporting an increase in interest than those who saw a fall.

Related articles

• 'Hint of arrogance' as bankers apologise
• Dismissed executive 'warned HBOS of risk'
• RBS to axe up to 2,300 jobs
• Oliver Wright: Failed bankers are Masters of the Universe compared to MPs
• Alistair Darling: The banks are to blame for this crisis
• Sarkozy says sorry to Brown over VAT cut comments
• 'This is the worst recession for over 100 years'
• Dominic Lawson: Bonuses are a political issue, not a moral one
• Jeremy Warner: Bankers' excesses require retribution, not reviews of pay
• Steve Richards: Politicians vilify the bankers – but they don't dare to act
• Leading article: These bankers must explain their disastrous decisions
• Bank employees set to sue over cuts in bonuses
• Division of the spoils – how the bonus billions are carved up
• 'Deeper' recession will lead to financial crime wave
• MPs demand apologies from fallen bank bosses
• Search the news archive for more stories

The return of house hunters boosted surveyors' optimism about future sales, with 10 per cent more surveyors expecting transactions to pick up in the coming months, than those who thought they would fall.

The number of sales agreed during the three months to the end of January also stabilised, with the average chartered survey estate agent arranging 9.9 sales, down only fractionally from an average of 10 during the previous three month period, although the figure was still the lowest level on record.

RICS spokesperson Jeremy Leaf said: "The latest survey provides further evidence of the eagerness of buyers to try and pick up bargains.

"This interest has yet to translate into sales but transactions may pick up in the coming months if the Government follows through on its recent announcement and introduces guarantees for the issuance of residential mortgage backed securities.

"The latest cut in interest rates may improve confidence for those on the margins, encouraging buyers looking for more attractive finance deals."

But surveyors remain gloomy about the prospects for prices in the short term, with 76.3 per cent more surveyors reporting price falls during January than those who saw rises, up from 73.9 per cent more in December.

Surveyors expect further price falls going forward, with confidence in prices falling to its lowest level in the survey's history.

RICS said the main factor that was depressing house prices was still the large stock of unsold homes on estate agents' books, relative to the pool of able buyers.

The average chartered surveyor estate agent had 75.4 homes on their books in January, 10 per cent less than a year ago and nearly 50 per cent down on the peak in March last year.

The group attributed the fall to homeowners opting to rent out their property rather than sell it for a reduced price in the current market.

Surveyors are most optimistic about sales rising in the south of England, with a balance of 38 per cent of surveyors in London expecting transaction volumes to rise, more than double the 18 per cent who predicted an increase in December.

The number of surveyors reporting price falls also improved in the South East, the North and the North West during January, although it deteriorated elsewhere across England and Wales.

In Northern Ireland the price balance reached its highest level since September 2007, although it still remains at a very depressed level, while there was also an improvement in Scotland.

Malcolm Barr, UK economist at JPMorgan Chase Bank, said: "Two questions arise from here: is mortgage availability sufficient to allow new buyer enquires to translate into actual transactions? And will any signs of an upswing in demand simply be met by more individuals putting their property on the market?

"As far as the first question is concerned, we would expect to see mortgage approvals for home purchase build on the increase reported in December, and failure to do so would be a clear signal that the constraints on credit availability are holding the housing market back."

Compare the best mortgages at Independent Compare