Residential property sales activity continues to pick up in UK but prices are falling in some areas

Chartered surveyors recorded the highest reading of vendor activity since May 2007, the month before the introduction of HIPS, according to the new March Housing Market index from the Royal Institution of Chartered Surveyors.
 
For a third consecutive month, the new instructions net balance outpaced the new buyer enquiries net balance. A net balance of 21% of surveyors saw a rise in new instructions which compares with a balance of 16% in February. New buyer enquiries stabilised in March, the net balance falling from 7% to zero.
 
Surveyors report that political uncertainty is pushing vendors to market their property before next month’s general election. Some 9% more chartered surveyors reported a rise than a fall in house prices, down from 18% in February.
 
The report shows, however, that there was significant variation in regional price trends, with London, the South East and Scotland the best performing markets. But surveyors reported that prices are now falling rather than rising in East Anglia, Yorkshire and Humberside, the North and the West Midlands.
 
Activity is expected to rise over the coming months, but at a more subdued pace than was expected in February. The sales expectations net balance fell from a positive 15% to 5%. Prices are expected to more or less stabilise over the coming months. The price expectations net balance fell from a positive 5% minus 2% in March.
 
The average stock of property on surveyors’ books increased 6% on the month to 67 properties per surveyor, the largest monthly increase since February 2008. However, the average number of completed sales fell by 2.8% on the month to 17.1 per surveyor.
 
This had the effect of lowering the sales to stock ratio, a key indicator of future house price inflation, from 27.8% in February to 25.5% in March which is the lowest reading since July 2009.
 
‘With the general election approaching and uncertainty growing over the political direction of the country, many vendors who were previously inclined to sit on the sidelines now appear eager to put their properties on the market,’ explained RICS spokesperson, Ian Perry.
 
‘For the time being, many of the key housing market indicators are still positive or stable. However, with stocks increasing and sales decreasing we may see some modest price falls in some regions although London, the South East and Scotland are continuing to perform well,’ he added.