Spring bounce in housing market likely to be short lived

Enquiries from new home buyers dipped in January, for the first time in 14 months.

According to the Royal Institution of Chartered Surveyors (RICS), the winter freeze may have been responsible for the downturn with house sellers also affected and the number of homes being put up for sale falling for the first time in seven months.

Last month, 20% more RICS members reported a fall in new buyer enquiries rather than a rise, compared to 18% reporting a fall in December; meanwhile, only 5% more surveyors reported a fall, rather than a rise, in new instructions compared to 15% more reporting a rise a month earlier.

However, a positive balance of 32% of RICS members reported a rise in prices in January, up from 30% in December, and for London, the proportion increased to almost two-thirds.

The research also revealed that 24% more respondents were expecting prices to rise than fall, in January, compared to 12% in December.

RICS spokesperson, Ian Perry, comments: “The cold snap in January clearly has a huge impact upon both supply and demand in the housing market with activity coming to a halt amidst the seasonal chaos.”

He adds: “Activity and interest is likely to pick up in the coming months as the market experiences a spring bounce.”

However, Mr Perry is expecting any rise in prices to be in the short term, with the possibility of the market running out of steam if supply outstrips demand.

Halifax and Nationwide are also predicting a flat market in 2010.

Halifax believes price rises could be curbed by an increase in properties for sale and Nationwide sees the potential for a recovery as limited by issues of affordability.

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