House prices have risen for the fifth month in a row, although at a slower rate, while more people are making enquiries about purchasing a house, claims the latest UK Housing Market Survey from the Royal Institution of Chartered Surveyors (RICS).
The report says although prices rose in March, the pace of growth has slowed from the previous month, with just 13% of chartered surveyor estate agents reporting a rise in prices instead of a fall, compared to 16% in February.
It also claims the higher prices are being driven by a sustained period of rising activity as buyer confidence has returned, with buyer enquiries up for the tenth month in a row, underpinned by low interest rates.
Agreed sales also continued to rise in March, although the survey also notes the number of new sellers also increased at the fastest pace since June last year, however despite this the overall amount of property for sale on surveyors’ books is down 6% from 2005.
Meanwhile, the research reveals price rises in London slowed sharply in March, as some of the impact form City bonus payments faded, although markets in the rest of southern England are continuing to strengthen, with Scotland also seeing strong price rises.
But the survey suggests for northern England, the Midlands and Wales, the market picture is more subdued, as these regions have all seen above average increases in employment over the past year.
Despite this, RICS says the industry is positive about a strong post-Easter rally, with price expectations at their highest since April 2004. It claims agents’ confidence is partly based on the fact buyers often commit to a purchase at this time of year and the economic going remains generally good.
The report also suggests the combination of rising buyer enquiries and greater quantities of property coming on to the market have made surveyors optimistic on prospects for activity in the coming months, with the March slowdown in prices not thought to be a sign of a significant weakening of the market.
Ian Perry, a spokesman for RICS, says people traditionally put houses on the market in the new year and sales pick up around Easter, and agents are clearly expecting this year to be no exception as the figures show a lot of optimism in the industry.
He points out price rises are strongest in London, the South West and Scotland, but remain weaker in the North and the Midlands where people are less certain over immediate employment, which could be because unemployment has risen for almost every month for a year in these particular areas.
Perry adds: “Some people may be more inclined to sell while others remain unaffected by the softening employment picture and are still keen to buy. This split in the economy is one explanation for the unusual situation where both new buyer enquiries and instructions to sell are rising simultaneously.”
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