Many potential purchasers believe that the market has reached a bottom but first-time buyers are still being denied access to the property ladder.
Following three successive monthly increases in the RICS new buyer enquiry series, RICS has asked further questions of its members to determine what is underpinning this sustained pick up in interest. 71% of chartered surveyors stated that lower house prices were responsible for the growth in enquires while 48% believed that buyers are increasingly convinced that the bottom of the market is in sight. Only 35% of surveyors believe that lower mortgage rates are tempting buyers. Meanwhile, just 15% referred to positive personal circumstances overwhelming negative macro concerns.
74% of chartered surveyors reported that it is existing owner occupiers who are driving the renewed level of interest while 38% of surveyors indicated that investors are coming back into the market. However, only 23% of surveyors thought that first-time buyers are a factor in the market. Interestingly, almost one in ten respondents suggested that overseas buyers were now looking for opportunities in the UK residential market, benefiting as they are, from favourable currency movements.
95% of chartered surveyors reported that existing houses were the most popular type of dwelling for those enquiring and only 32% of surveyors reported interest in flats. New build properties remain an even less attractive proposition for potential buyers.
Commenting, Simon Rubinsohn, RICS chief economist said: "Interest from owner occupiers is likely to persist over the comings months as those with large deposits look to capitalise on the drop in house prices. However, a sharply deteriorating employment picture may eat away at this improvement in sentiment pushing potential buyers back to the sidelines. To prevent this happening and help restore an orderly housing market, the government urgently needs to address the issue of the availability of mortgage finance. It is essential that guarantees for residential mortgage backed securities are introduced sooner rather than later."
