The Royal Institute of Chartered Surveyors recently released its new “Residental Market Survey” for May 2013, and it believes its respondents and seen a “gathering momentum” in the housing market”
“The activity picture has improved markedly, with the newly agreed sales balance increasing from 21 to 30 and the new buyer enquiries balance rising from 27 to 30. Both indicators have reached 2009 levels. The pick up in buyer interest over the last three months or so appears to be enticing more homeowners to test the market, with the new vendor instructions balance reaching 15, up from 8.
In spite of the increase in new instructions, average stock levels (per branch) actually fell on the month, which allied to a rise in average sales levels, pushed up the sales to stock ratio to 27.5%.
This gauge of market slack has increased by 5 percentage points over the last twelve months. However, it is still some way below its long average of 32.5%, indicating that while market conditions have tightened recently, at the national level they are still ‘looser’ than normal.
Meanwhile the pricing picture is also brightening. The price balance increased from 1 to 5 and the 3 month price expectations balance increased from 12 to 20. The survey also measures expectations in actual percentage terms and on this basis, respondents now expect house prices to increase by 1.4% over the next 12 months, compared to 1.1% last month and 0.1% in December.
There remains considerable regional variation, with prices over the next year expected to increase by 4.1% in London compared to 0.2% in Yorkshire and Humberside. Nevertheless, given that many parts of the UK are still experiencing house price falls in year on year terms, it is noteworthy that respondents across all of the survey’s regions are now expecting positive price growth over the next 12 months, including Northern Ireland at 0.6%.
On the lettings front, the data – which is not seasonally adjusted on a monthly basis due to its short history – suggests growth in tenant demand remains firm and continues to outpace growth in landlord instructions.”