Activity at all time low but opportunists enter the market
RICS UK housing market survey, June 2008

The average number of transactions per surveyor fell further in June but  some would-be-buyers are again showing interest in the market, says RICS’ UK housing market survey published today (15 July 2008).

The RICS house price balance improved slightly for the second consecutive month but still remains a significantly depressed figure. 88 percent more Chartered Surveyors reported a fall than a rise in house prices, a decrease from 92.2 percent in April.

The regional picture remains gloomy with surveyors in the West Midlands unanimous that house prices are falling. 

The inability of many to get secure mortgage finance is reflected in the collapse in transactions. 

The average number of transactions per surveyor (over the last three months) is now at 15.3, the lowest figure since the survey began and the net balance of new agreed sales remains in negative territory.

Demand is weak with the balance of surveyors reporting new buyer enquiries still well into negative territory.

However, there has been a noticeable improvement in the trend with 35 percent more Chartered Surveyors reporting a fall in buyer enquires compared to 50 percent in May and 69 percent in April.

Surveyors report that some buy-to-let investors are entering the market to take advantage of rising rents and equally that ‘predatory buyers’ are looking to bargain for reductions in a falling market.

The lack of new instructions to sell property continues to provide a layer of support to the market. 

Large numbers of distress sales (either repossessions or sales from those attempting to avoid the repossession process) have not taken place and the employment picture has not deteriorated to a degree where repossession levels have started to accelerate.

The balance of Chartered Surveyors reporting new instructions to sell property fell to -13 percent from -25 in May.
Commenting, RICS spokesperson Jeremy Leaf said:

"With demand so low, would-be-buyers are negotiating from a position of strength. Even in a weak market there are always opportunities for investors and buyers to profit and some are starting to circle for bargains.

"However, transaction levels remain incredibly low with many buyers cut out of the process by tight lending conditions."

ENDS

About RICS
RICS (Royal Institution of Chartered Surveyors) is the mark of property professionalism worldwide. It covers all aspects of property, construction and associated environmental issues. RICS has 86,000 chartered members (FRICS and MRICS) and 55,000 members in other categories of membership (TechRICS, trainees and students) globally. It represents, regulates and promotes the work of these property professionals throughout 146 countries. RICS is governed by a Royal Charter approved by Parliament which requires it to act in the public interest. It is also a professional regulatory body approved by Government (HM Treasury). Visit www.rics.org/press

Notes for editors:

The RICS question on measuring house price changes is as follows:
“Indicate by how much average house prices have changed over the last three months.” (Answers either being – falling, the same or rising)

RICS housing market survey is the longest running monthly survey of house prices in the UK, collecting data since January 1978.  The survey is cited by the Bank of England's monetary policy committee at its monthly interest rate setting meetings.

For further information regarding affordability conditions view RICS accessibility and affordability Indices: http://www.rics.org/accessibility

The RICS accessibility Index is a UK industry first, it calculates the upfront cost of an average priced home bought by First time buyers as a percentage of average annual take home pay. The inclusion of a varying loan-to-value ratio helps provide a more accurate picture of the interaction between house prices, incomes and required deposit. Stamp duty costs, when the average price of a FTB house is above the zero rate threshold, is also included in our calculations of up-front cost (we have not taken into account other up-front costs). The problem with using an affordability measure in isolation is that it gives a narrow picture of difficulties faced by prospective buyers, and does not give any information on the ability to muster up a sufficient deposit.

For further information, please contact:
Stephen Thornton
Senior Press Officer
RICS Communications
T: +44 (0)2076951682
M: 07969 177150
E: sthornton@rics.org