The average number of transactions per surveyor fell to a record low in December despite buyer interest remaining strong says RICS' UK housing market survey published today (13 January 2008).
The average number of transactions per agency (over the last three months) is now at 10.1, a drop from 10.6 in November, and the lowest figure since the survey began in 1978. The balance of surveyors reporting house price falls fell back slightly in December with 73.5% more Chartered Surveyors indicating a fall than rise in house prices, a decrease from 75.8% in October. Meanwhile, the number of transactions slipped further during the traditionally quiet Christmas period.
The regional picture remains equally depressed with Chartered Surveyors in London reporting only seven sales per agency over the last three months and surveyors in the South East and South West reporting only nine sales in the same period. Last month, the most buoyant region was the East Midlands with 15 sales per surveyor. It is noteworthy, however, that the sales to stock ratio an indicator of market slack and a key guide of future price changes has fallen to a record low after a period of stabilisation. In December, it dropped from 13.6% to 12.9%.
Significantly, interest in the market continues to remain upbeat. 17% more Chartered Surveyors reported a rise than a fall in new buyer enquiries up from 16% in November. As house prices fall, those with finance continue to look for bargain opportunities. Interest is strongest in the South West and East Anglia while the balance in London turned positive for the first time since 2006. The rise in interest reflects both the drop in asking prices and recent cuts in interest rates.
3% more Chartered Surveyors reported a rise than a fall in new instructions to sell property up from a zero net balance in November. Supply is starting to loosen in most regions but remains tight in London and the East Midlands.
Commenting, RICS spokesperson Ian Perry said: "Buyer interest is now at levels not seen since 2006 but without mortgage finance the housing market is at a standstill and transaction levels at an all time low. First-time buyers and owner-occupiers are now stuck in a market which does not fulfil their aspirations. The Government must act now to ensure that order is restored to the current chaos.
"A first step would be to for the Government to provide guarantees for the new issuance of residential mortgage backed securities. Without this help there is a real danger that homebuyers will be frozen out of the market, transaction levels and prices will fall to new lows, repossessions will increase and negative equity will become common place. Together this has the potential to push the country deeper into recession."