Residential property prices in the UK rose at a slower pace in December but fresh demand is still outstripping supply, according to surveyors.
For the seventh consecutive month, more chartered surveyors are reporting that the number of new instructions is increasing rather than falling, the latest report from the Royal Institution of Chartered Surveyors published today shows.
Although fresh demand for property was still outstripping new supply, the gap has narrowed and overall transaction levels were little changed in December, RICS said.
‘The recent loss of momentum in prices and the moderation in new buyer interest can be in part attributed to the housing market pulling down its shutters for Christmas. It is likely that the New Year will see more interest and activity in the market as those who held back start to market their property with renewed optimism,’ said RICS spokesperson Jeremy Leaf.
However, he added that a lack of properties for sale was continuing to support house prices.
‘New enquiries are continuing to outpace new instructions which is helping to push house prices higher,’ he said.
Price increases are still most widespread in London and the South East but prices are still falling steeply in Northern Ireland, with smaller falls still being recorded in Wales and the West and East Midlands.
The report also shows that other demand indicators are also losing some momentum, although they remain in positive territory. The newly agreed sales balance slipped to 22 from 24 while the sales expectations net balance dropped to six from 20.
Transaction levels were little changed in December. The number of sales per surveying firm is still hovering around 19 for the fourth consecutive month while the closely watched sales to stock ratio, a measure of market slack and a lead indicator of future prices, fell back slightly.
The situation is likely to stay positive in London, according to James Perris of De Villiers Surveyors. ‘Buyers are still outnumbering the properties available, resulting in further increases in prices. We would expect this trend to continue,’ he said.
In areas where prices are still falling there is less confidence. Andrew Morgan, of Morgan and Davies in Lampeter, Wales, said he sensed purchasers remained unsure about entering the market, even though property sales improved last year.
‘We have experienced a lot busier third quarter than in the last two years.
However, the market is very sensitively balanced with purchasers still very nervous and cautious. We do not expect many major changes,’ he said.
