The average number of transactions per surveyor fell further in June but some would-be-buyers are again showing interest in the market, says RICS' UK housing market survey published today (15 July 2008).
The RICS house price balance improved slightly for the second consecutive month but still remains a significantly depressed figure. 88% more Chartered Surveyors reported a fall than a rise in house prices, a decrease from 92.2% in April. The regional picture remains gloomy with surveyors in the West Midlands unanimous that house prices are falling.
The inability of many to get secure mortgage finance is reflected in the collapse in transactions. The average number of transactions per surveyor (over the last three months) is now at 15.3, the lowest figure since the survey began and the net balance of new agreed sales remains in negative territory. Demand is weak with the balance of surveyors reporting new buyer enquiries still well into negative territory. However, there has been a noticeable improvement in the trend with 35% more Chartered Surveyors reporting a fall in buyer enquires compared to 50% in May and 69% in April. Surveyors report that some buy-to-let investors are entering the market to take advantage of rising rents and equally that 'predatory buyers' are looking to bargain for reductions in a falling market.
The lack of new instructions to sell property continues to provide a layer of support to the market. Large numbers of distress sales (either repossessions or sales from those attempting to avoid the repossession process) have not taken place and the employment picture has not deteriorated to a degree where repossession levels have started to accelerate. The balance of Chartered Surveyors reporting new instructions to sell property fell to -13% from -25 in May.
Commenting, RICS spokesperson Jeremy Leaf said: "With demand so low, would-be-buyers are negotiating from a position of strength. Even in a weak market there are always opportunities for investors and buyers to profit and some are starting to circle for bargains. However, transaction levels remain incredibly low with many buyers cut out of the process by tight lending conditions."