In its latest housing market update, the trade body said it no longer expected house prices to fall by 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. This means approvals could potentially end 2009 nearly twice as high than at the end of 2008.
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.
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.”
The trade body’s rising confidence in the sector’s recovery followed news from Halifax that house prices had risen for the second time in three months in July, with the annual rate of decline continuing to ease.
The lender’s latest House Price Index for July rose 1.1% from June and was 12.1% lower than the previous year. The annual fall was last smaller in August 2008, when prices fell 10.9%. The July results compare with a 0.5% month-on-month fall and a drop of 15.0% on the year in June.
Seema Shah, property economist at analyst firm Capital Economics, said rise in indicated that the shortage of properties for sale was providing some short-term support for house prices, but warned this was not a sound basis for a sustainable recovery.
