The number of buyers in the UK housing market increased for the third month in a row during February, providing new hope that property prices may be close to bottoming out.
According to a new report – published today by the Royal Institution of Chartered Surveyors (Rics) – the number of inquiries by new buyers has been rising consistently since November, with most new purchasers claiming they have been attracted back to the market by lower prices.
Average house prices have fallen by more than 20 per cent since their peak in the summer of 2007, according to the Halifax, and by more than 17 per cent over the past year. However, prices saw their first month-on-month increase for almost a year during January – which supports Rics' claim that buyers are now returning to the market.
Rics said that the majority of new buyers have been existing homeowners who are upgrading to larger properties. It said new build properties failed to attract significant interest.
However, Rics said it was not convinced this represented a permanent change in the market's fortunes.
"Interest from owner occupiers is likely to persist over the coming months as those with large deposits look to capitalise on the drop in house prices," said Simon Rubinsohn, the chief economist at Rics.
"However, a sharply deteriorating employment picture may ... push potential buyers back to the sidelines. To help restore an orderly housing market, the Government urgently needs to address the issue of the availability of mortgage finance. It is essential that guarantees for residential, mortgage-backed securities are introduced sooner rather than later."Reuse content