Demand for property continues to rise
Hopes of a housing market revival have been given further weight by reports of an uplift in new buyer enquiries during June.
According to from the Royal Institution of Chartered Surveyors (RICS), the balance of new instructions remained "marginally in negative territory" last month. However, it also saw an increase in buyer enquiries, while price expectations turned positive in June for the first time since May 2007.
Recent surveys from both Halifax and Nationwide have delivered a mixed story with regard to increased signs of stability, with differing numbers being given for house price movements.
The RICS survey, which is considered one of the main measurements of housing activity, shows that although house prices are still falling, this appears to be easing slightly.
There was a sharp increase in newly agreed sales, while the average number of sales agreed per surveyor also climbed for the third consecutive month.
Figures from the Department for Communities and Local Government (DCLG) have also delivered some good news for the housing sector, with new figures showing the annual fall in house prices softened from 13% in April to 12.5% in May.
Howard Archer, chief UK and European economist at IHS Global Insight, says: "This suggests to us that house prices have recently gained some overall support from markedly increased buyer interest (resulting from sharply reduced mortgage interest rates and the substantial fall in house prices from their 2007 peak levels) as well as from a lack of new properties coming on the market."
However, he adds: "We suspect that house prices have not yet bottomed out. While buyer interest has clearly picked up markedly in recent months, this has so far translated only gradually into increased house sales. Housing market activity is still very low by past norms and at a level consistent with falling house prices."
And Seena Shah, property economist at Capital Economics, says: "Although rising buyer interest and a lack of sales instructions have led to a fall in the available stock of properties for sale, we are not convinced that it will put a lasting floor under house prices.
"Tight lending standards will keep a lid on what buyers can afford to pay for some time. What’s more, if prices do stabilise, we suspect that will trigger a rise in sales instructions, removing much of the upwards pressure on prices."