Opinion

Is The Worst Over For The Housing Market?

When the government revealed the UK economy contracted during the final quarter of 2012, there was a fear that the impact would be far reaching, especially in the property market. However, the Royal Institute of Chartered Surveyors (RICS) believes the worst is in fact over for the sector. In their latest housing market survey they revealed that the number of housing transactions increased once again in January.

Some 15 per cent more chartered surveyors noted rising sales last month - the fourth rise in as many months. Prices also remained broadly stable during the first month of the year. Although four per cent more respondents noted a price fall in January, property values have remained consistent with December 2012. Prices remained in positive territory in London and the South East, while Wales also enjoyed price increases for the first time since the first part of 2010. Taken together, RICS claims figures indicate that things are looking up for the property market.

Peter Bolton King, RICS global residential director, stated: "Price falls across the UK have gradually stemmed in recent months and it is interesting to see that the amount of completed transactions are on the rise, as confidence returns to the marketplace. While it is still very early days to talk about a comprehensive market recovery, activity levels are still encouraging and there is some optimism out there that things could continue to improve."

Nonetheless, the RICS acknowledges that the market still faces considerable barriers, with demand from prospective buyers dipping in the New Year and a net balance of nine per cent of surveyors suggesting that new buyer enquiries fell during January. This is a symptom of high house prices in key locations and "lofty deposits" demanded by lenders keeping first-time buyers off the property ladder. Consequently, there is very little movement in the lower end of the market. January also witnessed a slight fall in the number of homes coming on to the market, but the RICS believes this may in part be the result of the bad weather experienced across the country.

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