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Homebuyer demand edges up for first time in seven months

According to a new survey, homebuyers are gradually returning to the housing market, with 8% more agents reporting an increase in buyer enquiries.

A new survey from the Royal Institute of Chartered Surveyors (RICS) has found that while the 8% increase in buyer enquiries in September may seem modest, this is a significant turnaround compared to June, when a net balance of 34% of respondents reported a drop.

The survey also reveals that although the results show considerable variation across the UK, overall house prices continue to rise.

Despite buyer demand rising for the first time since February, the number of new instructions received by agents has fallen again, and it is this lack of supply that is said to be underpinning house prices. At just over 45 properties, the average level of stock on estate agents’ books remains close to historic lows.

The report also states that house prices are predicted to rise further. The net balance shows prices edged up in September and over the next three months house prices are expected to rise further still, with 14% more respondents expecting to see an increase.

Central London is one area where a greater level of caution was stated. The RICS found that prices are expected to fall in the capital, albeit modestly.

The reasons given for this include uncertainty surrounding the Brexit vote, along with changes in stamp duty, which are both thought to be having a negative impact on the top end of the market.

RICS chief economist Simon Rubinsohn said:

“The market does now appear to be settling down following the significant headwinds encountered through the spring and summer.

“Buyers do appear to be returning, albeit relatively slowly, but the big issue that continues to be highlighted by respondents is the lack of fresh stock on the market.

“Although this is not a new story, it is a significant one having ramifications for both prices and the level of turnover.”

Rubinsohn added:

“Central London remains something of an outlier with contributors telling us this is the one part of the market where there may be further give on prices in the near term. Elsewhere the price trend still seems on the up.”

e.surv director Richard Sexton said:

“These sentiment results show confidence within the housing market has remained generally resilient.

“The recent figures from the Council of Mortgage Lenders (CML) revealing increases in both remortgage levels and lending, particularly to first-time buyers, are a clear indication that the lending market remains active.
“However, the imbalance between supply and demand continues to put an upward pressure on house prices.

“Although more first-time buyers are entering the market, until more new homes are built properties will remain unaffordable to many. The government and the industry need to work together to address this issue if we are to see this confidence remain over the longer term.”