The RICS September 2012 Housing Market Survey highlights, at the national level, a broadly flat picture for both prices and transactions during the month. Expectations of price falls have become slightly less widespread, while there was a marked pick up in sales expectations.
The national price balance (which covers England and Wales only) improved slightly from -18 to -15 i.e. 15% more surveyors reported a fall rather than a rise in prices over the last three months. However, the breakdown of the data reveals that 65% of respondents reported no change, and of those reporting price falls, 74% are doing so in the 0 to -2% category.
Moreover, historically, a price balance in this ballpark has generally been consistent with flat annual house price growth as measured by the main indices. On the activity front, the numbers in September bounced around a little bit (instructions and enquiries increased a touch, agreed sales fell slightly) but they are overall consistent with a flat picture.
In terms of the outlook, near term sales expectations reached the highest level since May 2010. Although we would caution against reading too much into this (the UK lending data, though lagging the RICS data by a month, remain unambiguously weak and significant global ‘event’ risk remains which could derail any recovery) there are some grounds for believing that activity could pick up over the coming months. Indeed, the Bank of England’s Credit Conditions survey points to an increase in mortgage availability during Q4, thanks to the Funding for Lending Scheme (FLS). Meanwhile, partly reflecting the positive impact of the FLS on wholesale funding markets, some benchmark mortgage rates (on 2 and 5 year 75% LTV loans) have also started to come down.
Encouragingly, the relative improvement in sales and price expectations was also fairly broad based at the regional level.