Housing market buoyed by 'spring bounce'

The housing market enjoyed a spring bounce during April, with both property prices and sales levels rising, research showed today.

The Royal Institution of Chartered Surveyors said housing market sentiment "rebounded" during the month, helped by the better weather.

Around 17% more chartered surveyors reported house price rises than those who saw a fall during the month, up from just 9% more in March.

The balance of surveyors reporting newly agreed sales also turned positive for the first time this year at 12%, up from minus 8% during the previous month.

The average number of completed sales during the three months to the end of April also rose to 17.4 per surveyor, the first increase for three months.

But there was further evidence that the mismatch between supply and demand, a key factor behind 2009's price rises, is easing.

A balance of 11% of surveyors reporting a rise in the number of new homes being put up for sale in April, while only 8% reported an increase in inquiries from new buyers, although that was the highest level since December.

Activity levels are expected to continue increasing during the coming months, with many surveyors expecting the market to gain momentum following the General Election.

Around 25% more of surveyors expect sales to rise going forward, up from just 6% in March, and the highest level since October last year.

Around 7% also expect prices to rise, compared with a balance of 2% who were predicting further price falls in the previous month's survey.

RICS spokesman Jeremy Leaf said: "For much of 2010, the housing market has been under the shadow of the General Election, with the gap between supply and demand growing wider as potential house buyers opted to stand on the sidelines awaiting the outcome of the poll.

"However, the start of spring has seen renewed optimism with the good weather improving sentiment and surveyors expecting an increase in both sales and house prices.

"The housing market often sees an increase in new instructions in the early part of the year with sales boosted in the spring and this year has been no exception."

London continues to lead the market recovery, with 55% more chartered surveyors reporting a price rise during April than those who saw a fall, up from 32% more during the previous month, followed by the South East.

Surveyors in the South West, East Midlands and Scotland all also reported firm price increases.

But property prices are still falling in Northern Ireland, Wales and Yorkshire and Humberside.

Ed Stansfield, chief property economist at Capital Economics, said: "The softer tone evident in most of the RICS housing market balances since the turn of the year was partially reversed in April.

"It will be at least another month or two, however, before we know whether the market has finally shaken off its New Year hangover or whether April's more positive survey was a one-off."