Pick up in UK house sales expected

| October 9, 2012
Pick up in UK house sales expected

House sales in the UK are expected to improve in the next three months, helped by the government’s funding for lending scheme, according to the Royal Institution of Chartered Surveyors (RICS).

The Funding for Lending scheme, launched by the government and the Bank of England, makes £80bn of lower cost funding available to lenders to encourage them to offer more loans to commercial and personal borrowers.

RICS’ latest report suggests that house prices will remain stable despite the expected increase in sales.

Twenty-six per cent of surveyors expect house sales to increase in the next three months, the highest level since May 2010, according to RIC’s report.

“Although we would caution against reading too much into this, there are some grounds for believing that activity could pick up over the coming months,” RICS said.

According to the organisation, mortgages are becoming more readily available and rates are improving.

However with house prices falling across most of the UK, property sales are likely to be hampered by sellers being over-optimistic on prices.

The latest figures from the Bank of England suggested that the Funding for Lending scheme was having little effect on mortgage approvals.

The number of homebuyer mortgages approved in August was 47,665, only 109 more than July and lower than the average of 49,013 for the previous six months.

There was a greater increase in the number of remortgages approved, with 26,139 approvals in August compared with 25,329 in July.

However this was still below the six-month average of 27,686.

The beneficial effect of the Funding for Lending scheme could have been masked by a seasonal slowdown in housing market activity in August.

It is traditionally a sluggish month for house sales as many people go away on holiday.

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