Transaction levels hold up as more houses come onto the market

RICS December 2011 UK Housing Market Survey

Sales activity remained relatively firm during December and an increasing amount of new stock came onto the housing market, says the latest RICS UK Housing Market survey (09 January 2012).

The average number of completed sales per surveyor* in the three months to December was 15.2. While slightly down on November’s figure, this remains close to its best level since autumn 2010. However, sales expectations for the coming three months dipped to a net balance of 0% (from +4%). Surveyors report that unrealistic price expectations on the part of some vendors may be hindering transaction levels.

Elsewhere, new instructions edged up for the third consecutive month during December. 12% more respondents reported rises rather than falls in new homes coming onto the market, suggesting that sellers may gradually be returning in time for the new year. Significantly, the capital saw the greatest increase in supply with surveyors reporting a net balance of +38% – the highest figure since January 2005.

Prices across much of the country continued to fall during December, albeit at the slowest rate since June 2010, with 16% more surveyors reporting price falls rather than rises (from -17%). Regionally, London was the only area to see price increases (net balance +46) while the West Midlands and Yorkshire and Humberside reported the biggest drops with net balance readings of -47 and -43 respectively.

Alongside this, demand remained fairly steady with 2% more respondents reporting new buyer enquiries increasing rather than decreasing. Whilst marginally down on November’s figure of +7%, it seems that interest from potential buyers across the UK is remaining relatively steady. However, respondents continue to report that a lack of mortgage finance is hindering many, with the cash-rich best placed to take advantage of the current market.

Looking ahead, along with surveyors’ flat predictions for transaction levels, price expectations remain low with a net balance of -21% of respondents expecting prices to continue falling over the coming three months.

“While it’s encouraging that sales activity held up relatively well towards the end of the year, continuing problems with the economy and the ongoing instability in the eurozone seem to be weighing heavily on the UK housing market and expectations for the coming months are fairly subdued.

The increasing number of prospective sellers who placed their homes on the market in December is a positive development as a lack of stock has been a big issue in some parts of the country, but with sales expectations remaining flat, it is important that vendors are realistic in their pricing if they wish the sale to go through in good time.”

Ian Perry, RICS housing spokesperson

*Sales per surveyor recorded per branch

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