The March 2013 RICS Housing Market Survey highlights four key points. Firstly, prices at the national level are broadly flat (England and Wales). Secondly, transaction levels have increased, with both sales per surveyor and newly agreed sales rising this month. Thirdly, medium term expectations (one year ahead) are more strongly positive for both prices and sales than their shorter term equivalents. Lastly, the regional picture shows a broad based improvement in the price balance across the majority of regions, whilst London continues to outperform.
The ‘headline’ national price balance edged up from -7 to -1 i.e. 1% more surveyors reported price falls rather than rises over the last three months. This flat price picture masks a marked improvement in the percentage of respondents reporting a rise in prices. Indeed, the 21% reporting price rises (on a non seasonally adjusted basis) is the highest proportion since June 2010. Add to this the additional 65% of surveyors reporting no change in home values in the past three months and we can see a more positive underlying tone to the headline reading.
March saw a pick up in new buyer enquiries following a subdued start to the year, although instructions remained flat. Transactions also increased, with newly agreed sales rising for the third consecutive month. Indeed, sales per surveyor rose by 3.4% on the month to 17.4, the highest level in three years. The FLS introduced last year by the government seems to be supporting activity levels. Reflecting this is the latest Bank of England credit conditions survey. This showed greater availability of secured lending in the first three months of 2013 compared to the previous quarter. Moreover, lending institutions expect credit conditions to continue to ease in the coming months.
Surveyors’ expectations for the coming year were also upbeat, with both sales and prices set to rise in the 12 months ahead. That said, surveyors are slightly more cautious in the short term, anticipating prices to remain broadly flat in the coming three months.
At the regional level, in terms of current prices, the London market remains the standout performer, with surveyors seeing more modest price gains in the South East. Elsewhere, surveyors are less negative about prices this month, with Wales, the South West and the Midlands all recording flat or slightly negative price balances. Outside England & Wales, Scotland has seen less severe price falls
in 2013 compared to last year, while Northern Ireland saw its first positive price net balance since July 2007. We will need to see a similar result over the next few months before being convinced that
this market has turned a corner.