RTTNews - A large proportion of U.K. real-estate agents and surveyors indicated a housing market improvement for July, the Royal Institution of Chartered Surveyors said Tuesday.
The seasonally adjusted net price balance of surveyors reporting rising rather than falling prices was at minus 8% in July, the best outcome since August 2007. In June, it was minus 18%.
The latest survey provides more evidence that activity in the housing market is picking up, albeit from historic lows, RICS said in a statement.
Last week, RICS had warned that there was little chance for a quick return to the boom time as activity remains very weak by historical standards.
New buyer inquiries have now increased for nine consecutive months. There are also more definitive signs that the rebound in inquiries is feeding through into increased transactions.
Although demand for property is continuing to rebound, it still remains low from a historical perspective, said RICS' spokesman Jeremy Leaf.
He added that if mortgage availability remains insufficient to meet the increase in buyer demand, then it is possible that prices may slip back again, especially if unemployment continues to rise and mortgage rates increase.
According to the latest data from the Bank of England, mortgage approvals in June rose to their highest level in more than a year. The number of loans approved for house purchase was 47,584 in June, the highest since April 2008.
The central bank, which kept its key interest rate unchanged at a record low of 0.5%, increased the size of its asset purchase scheme to GBP 175 billion from GBP 125 billion for the proper functioning of the troubled banking system.
The average number of agreed sales per surveyor rose for the fourth month in a row. New vendor instructions to sell property actually edged into positive territory in July.
A net balance of 2% of surveyors suggested that new instructions had increased compared with June. RICS said this is the first time since May 2007 that this series has produced a positive outcome. This, significantly, has contributed to a modest rise in the number of unsold properties on surveyors' books. The average level of inventory rose in July to 60, which compares with 57 in June.
Despite the increase in inventory in July, the sales to stock ratio - a measure of market slack and a lead indicator of future prices - continued to edge upwards. It has now risen for seven consecutive months to reach 25, its best level since February 2008.
The improvement in market sentiment helped the price expectations series to remain positive for the second month in a row, RICS said.
The net balance of surveyors expecting prices to increase over the next three months climbed to 8%. Meanwhile, 29% more surveyors expect sales to increase rather than decrease over the next three months.
From a regional perspective, the net price balance is now positive in London, the South West, Scotland and the South East. The weakest net price balances are in Wales Yorkshire and Humberside and Northern Ireland.
Also on Tuesday, the Council of Mortgage Lenders said there was further signs of stabilization in the housing market in June, but transactions were still weak on a historic basis. Banks approved 45,000 house purchase loans, worth GBP 5.9 billion, up 23% from 36,500 loans in May.
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