RICS January 2010 Housing Market Survey

UK house prices rose again in January but buyer interest and new instructions to sell property fell as bad weather hit activity in the market, says the RICS national Housing Market survey published today (9 February 2010). 

The survey is based on reports from chartered surveyors across the country and the majority felt the fall in activity levels was temporary due to the bad weather. In general, they are optimistic about the future.

On a regional level, most respondents from Yorkshire and Humberside said prices had remained the same (75%). However, buyer enquiries were slightly down and agreed sales declined from a positive 29 to negative 16. Looking ahead for the next three months, the region’s surveyors don’t anticipate house prices rising much more; neither do they expect to see sales increasing, with the number of average sales per surveyor having declined recently from 23 to 22.

RICS spokesperson, Gary Edgar said: "Severe weather conditions in January appeared to stall the housing recovery that had been seen in the previous months leading up to Christmas. Low stock levels are forcing buyers to bid close to asking prices to seal sales while homeowners appear to wait for the traditional spring time to sell. Now may be the best to sell before the Easter rush as we expect many new properties will come on to the market."

Across the UK in January, 32 percent more chartered surveyors reported a rise than a fall in house prices, up from 30 percent in December. However, the net balance of surveyors reported that buyer enquiries fell for the first time in 14 months while new instructions dropped for the first time in seven months. 20 percent more chartered surveyors reported a fall than a rise in new buyer enquiries down from a positive reading of 18 percent while a net balance of five percent of surveyors saw a decline in new instructions which compares with a positive balance of 15 percent in December. 

The bad weather clearly had a negative affect upon business across the country with newly agreed sales also falling for the first time in ten months.

Surveyors are optimistic that these negative signs are a reflection of the extreme weather conditions experienced in the early part of the month. The number of surveyors expecting house prices to rise increased from 12 percent to 24 percent while the number of surveyors expecting sales to pick up over the next three months rose from seven percent to 24 percent in January.

Transaction levels fell slightly in January. The number of sales per surveying firm fell from 19 to 18 while the closely watched sales to stock ratio – a measure of market slack and a lead indicator of future prices– fell for the second successive month. 

RICS spokesperson, Ian Perry said: “The cold snap in January clearly has a huge impact upon both supply and demand in the housing market with activity coming to a halt amidst the seasonal chaos. Activity and interest is likely to pick up in the coming months as the market experiences a spring bounce.

“House prices are likely to rise in the short term but if more supply continues to come onto the market, it is possible that the market will run out of steam in the latter part of the year.”