Demand rises from potential house buyers

Surveyors reported a “considerable rebound” in interest from would-be buyers during October, with a balance of 18 per cent more surveyors reporting rises in new buyer inquiries than falls, the latest RICS housing market study found.

Until last month, interest had remained relatively subdued since December 2009, but RICS said much of the UK is now seeing a strong increase in potential buyers looking to test the pre-Christmas market.

The North East and the West Midlands saw the biggest surges in demand, with a net balance of 56 per cent and 35 per cent of surveyors respectively reporting rises rather than falls.

However, Northern Ireland and Scotland bucked the improving trend and did not experience the increased levels of buyer demand seen across the rest of the UK, the research said.

Surveyors are optimistic that the increased buyer interest will translate into rises in sales, with a balance of 25 per cent more surveyors predicting that transactions will rise rather than fall in the next three months.

Ian Perry, housing spokesman for RICS, said: “It seems that, with Christmas around the corner, those who are in a position to buy decided to get out there and see what is available.”

Mr Perry said the market now “desperately needs” the rise in potential buyers to result in increased sales.

RICS said transactions are still slow by historic standards, with surveyors selling an average of 15.2 homes in the three months to October, showing a slight improvement on the 14.9 sales per surveyor recorded in September.

Researchers said house prices across the UK are continuing to stabilise, although a balance of seven per cent more surveyors reported drops than those who saw rises.

This seven per cent balance is the least negative reading in more than two years, and price falls have been slowing down for three months in a row, RICS said.

Government schemes which have been launched in recent months to help kick-start the market include its NewBuy initiative, which helps people buy a new-build home with just a five per cent deposit, and an £80bn funding for lending scheme, which has boosted mortgage availability by giving lenders access to cheap finance.

However, lenders have toughened their borrowing criteria and, despite some recent exceptions, much of the increased mortgage availability so far has been aimed at people with bigger deposits.

Mr Perry continued: “Initiatives like the NewBuy scheme are all well and good but they need time to bed in and take effect, and access to affordable mortgage finance is still very difficult for many first-time buyers.

“With the Autumn Statement around the corner, we would like to see the Government focus on delivering new homes and encouraging the banks to lend at affordable levels.”