Interest in UK rises - but no Buyers

The RICS market report for February is interesting, although it won't stop UK agents tearing their hair out. The report says: "New buyer enquiries increase at the fastest pace since August 2006, but newly agreed sales and sales per surveyor continue to fall. "

This is remarkable when you consider that August 2006 was in the middle of the chaotic boom that preceded the current unprecedented downturn (unprecedented in our lifetimes in any case). The fact that there is so much activity in the market would indicate that there is a willingness to do business, but obviously not at the price levels we are currently experiencing. This can mean only one thing, further price falls to come. 

The report also says: "Sales expectations and price expectations both improve, but the latter measure is still extremely negative. The seasonally adjusted balance of surveyors reporting falling rather than rising prices deteriorated again slightly from 76.6 in January to 78.3 in February."

On the plus side, the increase in enquiries is the fourth consecutive month in which this has happened, which indicates demand in the marketplace. RICS sees this turnaround in enquiries as an indication that some level of buyer interest is returning to the market.

The interest is most likely being triggered by the sharp cuts in interest rates as well as the decline in house prices; both factors have improved affordability. The sales to stock ratio, however, is still close to December’s all time low of 12.9%.

From a regional perspective, the price balance improved in London, East Anglia, Wales, the North and the West Midlands. Everywhere else, including Northern Ireland and Scotland, the price balance deteriorated.

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