New homebuyer enquiries in April rose to their highest levels since November 2009, according to the Royal Institution of Chartered Surveyors (RICS). Its figures show that 25% more chartered surveyors reported a rise, rather than a fall, in demand for property in April, following a 13% jump in March.
RICS attributes the strengthening demand to the Government’s Funding for Lending Scheme, which has filtered through to lower mortgage rates this year, along with the Help to Buy scheme introduced on 1 April.
RICS also reported that instructions to sell property rose in April, but not by enough to meet demand, resulting in a rise in house prices – the first the Institution has recorded since June 2010.
The average number of property sales per surveyor over the past three months hit 17.1, with sales in March and April reaching a three year high.
Peter Bolton King, RICS global residential director, said:
“It is encouraging to see government initiatives are having an impact on the property market. Help to Buy in combination with the Funding for Lending scheme appears to be giving the market a shot in the arm. Thankfully, sales are expected to pick up over the coming months, albeit from historically low levels.
“However there are some understandable concerns that the measures will also lead to higher prices. In view of this, it is critical that developers are as good as their word and speed up the delivery of new stock.”
Ben Thompson, MD Legal & General Mortgage Club, said:
“The first half of this year was characterised by record low mortgage rates. As we move into the second half, we have seen momentum continue to build in the housing market. With the number of house viewings, the number of surveys being carried out and the number of new houses available all on the increase, we can see that there is definitely growing demand. What we need now is even more encouragement from lenders in the shape of more lending so this trend can continue.”
Figures from the National Association of Estate Agents (NAEA) chimed with the RICS findings, with the number of agreed sales remaining strong in March, coming in at an average of eight sales per branch.
This puts the ratio of house hunters purchasing homes at levels not seen since the summer of 2011, with one home being sold for every 39 house hunters in Q1 2013, improving from one every 43 this time last year (Q1 2012).
However, the NAEA expressed concern that the percentage of sales to first-time buyers (FTBs) fell in March, suggesting that first-timers are still struggling to find finance, despite Government measures.
President of the NAEA Mark Hayward, said:
“House hunters who are set on completing their purchases have not been deterred by the cold start to spring and sales have remained resilient, despite the conditions. With the cold weather finally withdrawing we now expect that the overall number of house hunters may rebound over the next couple of months.
“FTBs are still in need of further help however. The declining FTB numbers this year prove that existing Government schemes outside the new home sector are still failing to give this portion of the market acceptable access to mortgage finance, and more must be done in the short term.”
However, figures released today by the Council of Mortgage Lenders suggest that lending to first-time buyers is increasing, suggesting that the number of completed sales to those looking to get on the housing ladder should pick up in the coming months.
