It is lower house prices that have sparked interest but first time buyers are still being denied access to the property ladder because of the lack of availability of mortgage finance, according to the Royal Institution of Chartered Surveyors.
Its latest researcher shows that following three successive monthly increases in the RICS new buyer enquiry series, a reliable lead indicator of transaction activity, interest is increasing and expected to persist.
Some 71% of chartered surveyors stated that lower house prices were responsible for the growth in enquires while 48% believed that buyers are increasingly convinced that the bottom of the market is insight.
Only 35% of surveyors believe that lower mortgage rates are tempting buyers. Meanwhile, just 15% referred to positive personal circumstances overwhelming negative macro concerns.
It is existing owner occupiers who are driving the renewed demand according to 74% surveyors and 38% indicated that investors are coming back into the market.
However, only 23% of surveyors thought that first-time buyers are a factor in the market. Interestingly, almost one in ten respondents suggested that overseas buyers were now looking for opportunities in the UK residential market, benefitting as they are, from favourable currency movements.
Interest is dominant in existing houses with most buyers looking in this direction while apartments are not generating much interest and new builds are an even less attractive proposition for potential buyers.
'Interest from owner occupiers is likely to persist over the comings months as those with large deposits look to capitalise on the drop in house prices,' said Simon Rubinsohn, RICS chief economist.
However, he warned that a sharply deteriorating employment picture may eat away at this improvement in sentiment pushing potential buyers back to the sidelines.
'To prevent this happening and help restore an orderly housing market, the government urgently needs to address the issue of the availability of mortgage finance. It is essential that guarantees for residential mortgage backed securities are introduced sooner rather than later,' he added.