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 RICS UK Housing Market survey published February 9, 2010.
In January, 32% more Chartered Surveyors reported a rise than a fall in house prices up from 30% 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.
Moreover, 20% more chartered surveyors reported a fall than a rise in new buyer enquiries down from a positive reading of 18% while a net balance of five percent of surveyors saw a decline in new instructions which compares with a positive balance of 15% in December. The bad weather clearly had a negative affect upon business with newly agreed sales also falling for the first time in ten months.
However, 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% to 24% while the number of surveyors expecting sales to pick up over the next three months rose from seven percent to 24% 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.
Commenting, 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."
RICS housing market survey is the longest running monthly survey of house prices in the UK, collecting data since January 1978. The survey is cited by the Bank of England's monetary policy committee at its monthly interest rate setting meetings.