Vendors continue to sit out housing market downturn

| October 16, 2009 | 0 Comments

In its September survey of the UK housing market, the Royal Institution of Chartered Surveyors (RICS) describes previous optimism that vendors were starting to return to the market as “a little premature”.

A net balance of only 4% of surveyors reported a rise in new instructions, compared to 12% in August, and the average number of unsold properties on estate agents’ books remained unchanged at 64.

However, the body concludes that a lack of supply continues to underpin house prices, with a net balance of 22% of surveyors reporting rises rather than falls in September, up from 10% in August.

The ratio was at its highest since May 2007, when the net balance of RICS members reporting rises stood at 25%.

The South of England continues to lead the upturn while Wales and Yorkshire and Humberside registered negative net balances.

In September, average sales per surveyor increased to 18 over a three month period and the sales to stock ratio rose for the ninth consecutive months to 29, its highest level since December 2007.

The pace at which new buyer interest has improved slowed for the third consecutive month with a positive net balance of 36% in September, compared with 47% in August.

RICS spokesperson, Ian Perry, comments: “A lack of supply is still underpinning the rise in house prices with new instructions to estate agents only edging up very gradually.”

According to Mr Perry, the imbalance between demand and supply “suggests that house prices will move higher in the near term.”

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