The balance of surveyors reporting house price falls fell back slightly in November with 76.5 percent more Chartered Surveyors indicating a fall than rise in house prices, a decrease from 81 percent in September. Meanwhile, the number of transactions slipped further as lenders continued to keep a tight grip on finance. The average number of transactions per agency (over the last three months) is now at 10.6, a drop from 10.9 in November, and the lowest figure since the survey began in 1978.
The regional picture remains equally depressed with Chartered Surveyors in London reporting only seven sales per agency over the last three months and surveyors in Wales and East Anglia reporting only nine sales in the same period. Last month, the most buoyant region was the North East but even this area has dropped from 16 sales to 14. It is noteworthy, however, that the sales to stock ratio - an indicator of market slack and a key guide of future price changes - seems to be stabilising albeit at historically low levels. In November, it edged up from 13.5 percent to 13.6 percent.
Significantly, interest in the market turned positive for the first time since October 2006 while expectations that sales volumes will pick up also remained positive - although surveyors are less optimistic than in October. 14 percent more Chartered Surveyors reported a rise than a fall in new buyer enquiries up from a negative balance of minus nine. The biggest increase in interest occurred in the West Midlands while the balance in the South West also rose. The rise in interest reflects both the drop in asking prices and recent cuts in interest rates. Demand is weakest in London with some continuing to adopt a wait and see approach and others entering the lettings market. The balance of Chartered Surveyors expecting an upturn in sales over the next three months remains in positive territory at nine percent, a drop from a more optimistic 20 percent in October.
One percent more Chartered Surveyors reported a fall than a rise in new instructions to sell property up from minus four in October. The biggest turnaround occurred in the West Midlands and the South West but supply in most other regions remains tight.
Commenting, RICS spokesperson Jeremy Leaf said: "Many are starting to see the current market as an opportunity to purchase a previously unaffordable property despite the worsening economic picture. But, unless people feel relatively confident about their job prospects, they're unlikely to even try to obtain mortgage finance unless of course trading down or seeking to release capital. Vendors still have to accept the inevitable fact that house prices are falling and re-price their property to suit current market conditions."
