Fastest growth in would-be buyers for four years
A net balance of 53% more chartered surveyors reported increases in demand from buyers returning to test the market, nationwide, and this activity saw a sizeable peak in July this year.
Peter Bolton King, RICS global residential director, said: “These results are great news for the property market as it looks like at long last a recovery could be around the corner.
“Growth in buyer numbers and prices have been happening in some parts of the country since the beginning of the year but this is the first time that everywhere has experienced some improvement.”
This growth was seen in every part of the UK as the recovery, initially focused in the South East, spread to regions across the country.
The West Midlands and the North East, areas which have suffered more than most since the market crash, experienced the biggest increases in buyer activity in July.
Meanwhile prices rose in the country for the fourth consecutive month and grew at their fastest rate since the market peak of November 2006.
Again this was not confined to the more affluent parts of the country, such as London, but every region saw growth as the year progresses to the end of the summer period.
In tandem with rising buyer confidence more potential sellers looked to test the market and place their homes up for sale.
Last month 15% more respondents reported rises rather than falls in new instructions.
This reading has now been in positive territory for the last six months. But in each of these months existing homeowner instructions have been outstripped by the change in new buyer enquires.
And, looking ahead, the data indicates that prices across the country are going to continue to rise further with a net balance of 35% more surveyors predicting increases.
Transaction levels are expected to follow this trend as 53% more respondents expect sales to rise rather than fall over the coming three months.
Ben Thompson, managing director of Legal & General Mortgage Club, said: “The data suggests there is a resurgence underway in the housing market and increases in prices and transactions are obviously positive indicators.
“The last few years has seen a lag in values in many parts of the country as the market worked its way through the crisis. So while steady gradual growth in house prices and increased transactions are a good thing it’s important that price inflation does not gallop ahead in places like London and the South East.”
Thompson said if that were to happen the net result would be that ordinary borrowers would find themselves priced out and a bubble could form which would be bad news aspiring homeowners.
Brian Murphy, head of lending at Mortgage Advice Bureau, said: “Despite concerns over long-term house price growth buyer confidence has surged across the country this month with RICS reporting the greatest interest in the property market for four years.
“Government support and the Bank of England’s interest rate freeze have coaxed the market back into action. As lenders make the most of the generous funding available the future continues to appear bright for homebuyers.”
Peter Williams, executive director of the Intermediary Mortgage Lenders Association, said: “Although July’s residential market survey from RICS credits government measures with encouraging the pickup in activity the latest house price index from the Office of National Statistics showing the annual growth rate increasing from 2.9% to 3.1% in the space of a month – is a subtle warning about the potential long-term impact of these incentives.
“The increasing growth rate of house prices still needs to prompt house builders into greater action if we are to avoid a growing demand and supply mismatch.
“The market is enjoying better pricing and product availability but perhaps the biggest benefit of the Funding for Lending Scheme has been the positive impact on consumer interest spurred on by Help to Buy.”