Economic gloom holding back the housing market

| December 13, 2011 | 0 Comments
Economic gloom holding back the housing market

Although the demand for property increased in November, the ongoing economic downturn is holding back housing activity according to the latest report from the Royal Institution of Chartered Surveyors (Rics)

Rics’ UK Housing Market survey for the three months to the end of November showed a small improvement in both demand from buyers and property sales during the month.

Seven per cent more of the surveyors who took part in the survey reported an increase in new buyer enquiries rather than a fall, in November.

The average number of sales recorded by each surveyor branch increased from 15 in October to 15.4 in November and the majority of surveyors expect sales to continue to increase in the coming months.

For the year as a whole, the housing market has been subdued and the survey found that a growing proportion of surveyors consider economic uncertainty the main reason for this, even more so than difficulties in obtaining a mortgage and fears that house prices may fall.

The survey showed ongoing variation in house prices across the regions and a separate report from Rics suggests that prices will keep rising in London but will either fall or remain steady in other parts of the UK.

Rics’ housing spokesperson Alan Collett said: “It is encouraging that buyer interest has edged upwards in the face of the endless diet of negative news from Europe and the turmoil in financial markets.

“However, a meaningful recovery still seems some way off,” he added.

The latest report from the Halifax also suggested that the weak economy is holding back the housing market.

The bank expects the economic downturn and high unemployment levels to hold down house prices throughout next year although, in line with the Rics report, it expects prices to be stronger in the south east and London.

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