Mortgage News
RICS positive on house prices for 2009
House prices will end 2009 higher than they started the year due to price rises in certain areas and a shift in market sentiment over the past few months, according to the Royal Institution of Chartered Surveyors (RICS).
In its latest housing market update, the trade body revised its previous expectation of house price falls of between 10% and 15% this year.
RICS added it was optimistic mortgage approvals will increase to around 55,000 a month for the remainder of the year due to a continued rise in new buyer enquiries. It said that approvals could potentially end 2009 nearly twice as high than at the end of 2008.
However, RICS also said a return to an orderly market is still some way off as activity remains very weak, transactions remain well below the average and housing supply is a long-term problem.
It added that further increases in mortgage rates, rising unemployment or prolonged weakness in the economy could all challenge the emerging recovery in the market.
However, Brigid O’Leary, senior economist at RICS, said the return of buyer demand and the limited availability of housing on the market could be enough to support prices.
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She commented: “There has been a clear change in the housing market over the past few months and, as a result, it is unlikely we will now see the kind of house price falls widely predicted at the start of the year.”