14 May House Demand Hits A ‘Three Year High’
Demand for homes reached its highest level in more than three years last month as Government schemes to boost the market began to take effect, surveyors say. New buyer enquiries were at their highest level since November 2009 and prices were also starting to rise, the figures suggested.
The Royal Institution of Chartered Surveyors (RICS), which published the figures, said 25% more surveyors reported that demand for property had risen rather than fallen.
It is the seventh positive result in the last eight months, following a 13% reading for March, RICS said.
The change was attributed to the impact of the Funding for Lending Scheme (FLS) introduced last year and the more recent Help to Buy initiative.
FLS is designed to loosen borrowing for households by giving lenders access to cheap finance, while Help to Buy provides loans for those struggling to find a deposit. Mortgage guarantees will also be on offer from next year.
Peter Bolton King, RICS global residential director, said: “It is encouraging to see Government initiatives are having an impact on the property market.
“Help to Buy, in combination with the Funding for Lending scheme, appears to be giving the market a shot in the arm.
“Thankfully, sales are expected to pick up over the coming months, albeit from historically low levels.
“However there are some understandable concerns that the measures will also lead to higher prices. In view of this, it is critical that developers are as good as their word and speed up the delivery of new stock.”
With reported instructions to sell rising more modestly than demand, prices were finally beginning to rise, the survey found, recording its first positive reading for them since June 2010.
On average, surveyors predicted prices to rise by just over 1% over the next 12 months, compared with expectations of just 0.1% in December.
The highest forecasts for increases were in London, but there was a stark disparity with other regions.
A fall in prices was reported by 22% more surveyors in the North East, 16% in Scotland and 20% in the West Midlands.
In Northern Ireland, where figures are compiled separately, 83% more surveyors reported demand up. But the data for house prices was disappointing, with 33% more reporting falls – after an improvement last month for the first time since July, 2007.
Ian Denton, a surveyor at Jackson-Stops & Staff in Woburn, Bedfordshire, said: “At last we are seeing a pick-up in activity both from prospective purchasers and vendors.”
But Jeremy Dell, an estate agent in Oswestry, Shropshire, said: “Vendors are generally having to accept lower offers than originally expected.”