A survey carried out in September by the Royal Institution of Chartered Surveyors (RICS) showed that while the increase in enquiries was modest, with a net balance of +8% more surveyors reporting a pick up in demand, it was a significant turnaround since June, when a balance of -34% was reported.
A positive net balance implies that more respondents are seeing increases than decreases.
The report did note a considerable variation existed across the UK, with some agents seeing a more stable trend in demand emerging as opposed to any recovery just yet.
At the same time, surveyors reported a drop in new sales instructions. This marked the seventh consecutive month in which listings have dropped and the continuation of a trend which has been seen over the last two years, were the stock of homes for sale has consistently dwindled.
RICS reported that the average stock levels of estate agents’ books remained exceptionally low.
The uptick in buyer demand and a lack of interest from existing homeowners to sell-up is firmly underpinning house prices.
A net balance of 17% of surveyors noted an increase in prices up from 13% in August. Net balance measures have increased over two consecutive reports, having eased off between February and July this year. Regionally, prices continue to fall in central London and the North East, although the North East’s pace of decline has begun to slow.
Nationally, RICS reported its members expected a rise in house prices over the next three months stating sentiment from surveyors was at its most positive since March.
But, surveyors do not expect to see house price growth across London as uncertainty following the EU vote and Stamp Duty changes continue to have a negative impact on the top end of the market. London is the only area in which prices are not projected to rise over the year ahead.
Simon Rubinsohn, RICS chief economist, said: “The market does now appear to be settling down following the significant headwinds encountered through the spring and summer. Buyers do appear to be returning, albeit relatively slowly, but the big issue that continues to be highlighted by respondents is the lack of fresh stock on the market. Although this is not a new story, it is a significant one having ramifications for both prices and the level of turnover.”
He added: “Central London remains something of an outlier with contributors telling us this is the one part of the market where there may be further give on prices in the near term. Elsewhere the price trend still seems on the up.”
Tenant demand was reported to be strong in September, with survey results showing the strongest rate of growth in 12 months.
On average, landlord instructions were unchanged but did increase notably in London and Wales. London remained the only area in which rents were expected to come under pressure in the near term, while virtually all other areas were anticipated to chalk-up solid gains.
