Housing market: Seller numbers 'outweighing buyers'

Cheltenham residents give their views on house prices

The property market has bounced back after its dip at the start of 2010.

In March the number of people trying to sell their homes hit its highest level since May 2007, the Royal Institution of Chartered Surveyors (Rics) said.

The Council of Mortgage Lenders (CML) said the number of new loans granted to home buyers in February was 12% higher than the previous month, at 35,000.

And annual house price inflation rose from 6.2% to 7.4% in February, according to government figures.

Cold weather and the reintroduction the old stamp duty threshold of £125,000, at the end of 2009, produced a slump in sales and lending at the start of the year.

That led to a dip in prices in February, put at 0.1% by the house price report from the Department for Communities and Local Government (DCLG).

But this now seems to have passed.

The number of new mortgages granted in February was not only higher than in January but 49% up on a year ago, when the market was at its most depressed in the wake of the banking crisis.

However Bob Pannell, the CML's head of research, was cautious about prospects for the rest of the year.

"Transactions have been affected by the ending of 2009's stamp duty concession and the harsh weather, making it hard to identify clear trends in recent months," he said.

"We are unlikely to see much change in the near future although the new stamp duty exemption for first-time buyers could boost the market somewhat and we hope to see the traditional seasonal pick-up as the weather gets warmer and the days get longer," he added.

More sellers

Rics said in March new instructions from sellers had outstripped enquiries from would-be buyers for the third month in a row.

Activity is expected to rise over the coming months, but at a more subdued pace, meanwhile, prices are expected to more or less stabilise over the coming months Royal Institution of Chartered Surveyors

Price increases were still more common than price falls across the UK, but the surveyors' body predicted prices would stabilise in the next few months

"With the general election approaching and uncertainty growing over the political direction of the country, many vendors who were previously inclined to sit on the sidelines now appear eager to put their properties on the market," said Rics spokesperson Ian Perry.

"However, with stocks increasing and sales decreasing we may see some modest price falls in some regions although London, the South East and Scotland are continuing to perform well," he added.

The latest monthly Rics survey indicated that prices during March had dropped in East Anglia, Yorkshire & Humberside, the north of England, the West Midlands and Northern Ireland, but had continued to rise strongly in London, the South East and Scotland.

Prices

An apparent shortage of properties for sale has been cited by most commentators as the main reason for the surprising rise in house prices, which started in spring 2009.

Although the precise scale of the rebound is disputed, with different figures being generated by different surveys, there is little doubt that the recent trend has been upwards.

The DCLG's figures confirmed the findings of other surveys that prices had fallen back in February.

But over the past year prices have risen significantly, up by 7.4% on the DGLG's measurement - a bigger increase than the 6.2% rise recorded in the year to January.

Reflecting the low level of completed sales since the start of the year, Rics said the average number of sales per surveyor had dropped from 18 in the previous three months to 17, but predicted that the market would pick up.

"Activity is expected to rise over the coming months, but at a more subdued pace, meanwhile, prices are expected to more or less stabilise over the coming months," Rics said.