House prices in December rose at slower pace as the gap between supply and demand narrowed, says RICS UK Housing Market survey published today (12 January 2010). In December, 30% more Chartered Surveyors reported a rise than a fall in house prices down from 35% in November.
A significant majority of surveyors are still recording price increases in London, the South East, the South West and East Anglia. However, more surveyors in the North and the West Midlands are seeing falls in house prices indicating that the recovery in the market is less entrenched in some parts of the country than others.
For the seventh consecutive month, more Chartered Surveyors are reporting that the number of new instructions is increasing rather than falling. 17% more Chartered Surveyors reported a rise than a fall in new instructions. Fresh demand for property is still outstripping new supply but the gap has narrowed. 20% more surveyors stated that enquiries from potential purchasers are rising rather than falling but enquiries rose at the slowest pace since January 2009. Other demand indicators are also losing some momentum, although they remain in positive territory. The newly agreed sales balance slipped to 22 from 24 while the sales expectations net balance dropped to six from 20.
Transaction levels were little changed in December. The number of sales per surveying firm is still hovering around 19 for the fourth consecutive month while the closely watched sales to stock ratio a measure of market slack and a lead indicator of future prices fell back slightly.
Commenting, RICS spokesperson, Jeremy Leaf said: "New enquiries are continuing to outpace new instructions which is helping to push house prices higher. The recent loss of momentum in prices and the moderation in new buyer interest can be in part attributed to the housing market pulling down its shutters for Christmas. It is likely that the new year will see more interest and activity in the market as those who held back start to market their property with renewed optimism."