House sales have increased for four months in a row, in further signs that confidence in the market is picking up, surveyors reported today.
An overall balance of 15 per cent more surveyors said that sales rose rather than fell in January, continuing a general trend of sales increases seen for four consecutive months, the Royal Institution of Chartered Surveyors (RICS) said.
Sales are predicted to rise further as spring approaches but prices are expected to remain flat, the latest findings showed.
House prices have remained broadly stable, with 4 per cent more surveyors saying that prices fell rather than increased last month.
In a separate report also released today, the Office for National Statistics said that in the 12 months to December 2012 UK house prices rose by 3.3 per cent. Their figures suggest growth of 3.4 per cent in England, 2.4 per cent in Wales and 3.1 per cent in Scotland, with a decline of 5.7 per cent in Northern Ireland.
However, annual house price increases in England were driven by a 6.4 per cent rise in London and a 3.7 per cent increase in the South East.
RICS said that across the country, prices continued their upward march in London and the South East - and also moved into positive territory in Wales for the first time since early 2010.
The West Midlands and Yorkshire and Humberside saw the most severe price falls and surveyors in Scotland and Northern Ireland continued to record falling prices.
The findings echo a recent study from property analyst Hometrack, which said that prices were broadly flat month-on-month in January but estate agents have already seen signs of uplifts in sales this year.
RICS said that despite the recent signs of improvement in the market, demand from would-be buyers has dipped slightly since the start of the new year, with a balance of 9% surveyors saying that new enquiries fell in January. There was also a slight fall in the number of homes coming on the market.
However, surveyors suggested that the recent bad weather was behind the recent softening in the figures.
Peter Bolton King, RICS global residential director, said: “Price falls across the UK have gradually stemmed in recent months and it is interesting to see that the amount of completed transactions are on the rise, as confidence returns to the marketplace.
“While it is still very early days to talk about a comprehensive market recovery, activity levels are still encouraging and there is some optimism out there that things could continue to improve.”
Mr Bolton King said that the “lofty deposits” required by many lenders are still preventing many would-be first-time buyers from getting on the ladder.
Richard Sexton, director of e.surv chartered surveyors, said: “The hope now is that the improvement isn’t just a flash in the pan. There are plenty of reasons to believe it won’t be. Funding is cheaper. Borrower finances are better. And the Eurozone crisis lies dormant. All of this bodes well for the rest of the year.”
Activity in the market has been boosted in recent months by the Government's Funding for Lending scheme, which aims to unblock the flow of credit by giving lenders access to cheap finance.
Competition so far has been particularly strong around people with deposits of 40% or more as lenders have battled to drive rates below 2% and many of these deals have also come with hefty fees.
But there have also been signs of greater competition to attract first-time buyers and people with lower amounts of equity, such as Barclays' recently-launched “family springboard” mortgage for people with a 5% deposit and a selection of fee-free deals from the Co-op.
The Council of Mortgage Lenders (CML) recently reported an uplift in lending to first-time buyers and has said it expects sales generally to pick up this year.