House sales up slightly as mortgage approvals rise

15 April 2009 / by Rebecca Sargent
The number of property sales agreed per surveyor increased slightly last month, new figures from the Royal Institution of Chartered Surveyors (RICS) have revealed.

According to the longstanding housing market survey, there were 9.7 sales agreed on average per surveyor in March, compared to 9.6 in February.

The news follows yesterday's figures from the Council of Mortgage Lenders (CML), which show that the number of mortgage approvals rose four per cent between January and February this year.

The RICS survey also found that buyer enthusiasm has continued to grow as more surveyors recorded a rise than a fall in new interest for the fifth consecutive month.

In addition, the sales to stock ratio - regarded by RICS as a key gauge of market stock - increased for the third consecutive month, "indicating that a stabilisation in prices may occur later in the year."

However, RICS spokesperson Ian Perry warns: "Buyer interest is starting to gain real momentum but will remain frustrated while mortgage finance is scarce."

According to Mr Perry, first time buyers will continue to struggle: "Accessibility for first time buyers is likely to remain difficult while loan to value ratios generally remain at current levels.

"The market is still in a fragile state but with demand continuing to pick up, there may be more signs of stabilisation in the coming months."

Economists agree with this analysis; Howard Archer from Global Insight said: "Any pickup in activity over the coming months is likely to be gradual and fitful, given ongoing very poor economic fundamentals and still-tight credit conditions."

Reinforcing the point that mortgage finance continues to be a plight for first time buyers, he added: "It is still very difficult for many people to get mortgages, particularly first time buyers – and this situation is likely to improve only gradually."

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