London’s housing market saw an increase in activity during October, as sales levels rose, and demand edged up, says the latest RICS UK Housing Market survey (8 November 2011).
During October, 23 per cent more chartered surveyors in London reported newly agreed sales rose rather than fell, representing an increase in activity after last month (seven per cent). Although still at historically low levels, this rise represents the best reading since April. Some surveyors attributed this increase to growing realism from sellers, who are now more willing to take offers in order to secure a sale. However, respondents also note that if buyers are able to access finance, banks are taking a long time to agree lending terms, which is slowing down the purchase process.
New buyer enquiries, which are a good indicator of buyer demand, edged up to a net balance of +8 (from +6 per cent in September). Meanwhile, new instructions, which highlight supply levels also increased, moving from a net balance of +16 per cent to +20 per cent in October. However, surveyors added that uncertainty in Europe spilling over to the UK economy and restricted mortgage availability are still impacting on the market, resulting in more caution from buyers and sellers.
Regionally, London continues to be the only region recording rising prices at the present time; 41 per cent more surveyors reported prices fell rather than rose during October (from 27 per cent more in September). London is also the only area where the price expectations net balance is positive (at +6 per cent). Sales expectations were also very strong, with 43 per cent more surveyors in the region anticipating sales will increase over the coming three months.
Commenting, RICS London spokesperson, Jon Pishiri, said:
“It is encouraging that activity levels appear to have increased over the past month. Indeed, chartered surveyors in London are also generally upbeat about the near term prospects for transactions and house prices. However, with the chaotic events in the euro area threatening to spill over to the UK and banks still imposing tough conditions on loans to first time buyers, any recovery in sales is still likely to be relatively modest. This will inevitably leave many people who would like to own a home unable to access the market.”
