Signs of housing market pick-up increase, but not for first-time buyers

12 May 2009 / by Rebecca Sargent
Tentative signs of a pick up in housing market activity broadened in April, the latest survey from the Royal Institution of Chartered Surveyors (RICS) has revealed.

According to the survey, new buyer enquiries have now increased for six consecutive months, with the number of surveyors reporting an increase in interest climbing to its highest level since August 1999.

Furthermore, evidence suggests that the higher level of buyer interest is beginning to filter through into actual house sales. The average number of sales per agent increased from 9.7 in March to 10.6 in April.

And, as the market picks up, house prices are expected to stabilise in the coming months, as the number of surveyors reporting an overall fall in house prices slows.

Commenting on the news, RICS spokesperson Jeremy Leaf said: "House prices could stabilise in the coming months but prospective purchasers – and first-time buyers particularly – will continue to encounter challenges while banks maintain current loan to value ratios and make accessibility difficult even for those who have accumulated considerable equity in their existing properties."

The Bank of England has now kept interest rates at 0.5 per cent for two consecutive months, and experts suggest that this could signal an end to low tracker and variable mortgage rates, as there is nowhere to go but up.

Speaking of the hardship felt by first time buyers in the mortgage market, Ben Thompson, mortgage director at Legal & General said: "The mortgage market is changing rapidly and potential first-time buyers are being forced to save considerable deposits in order to get a mortgage."

Commenting on the RICS survey's findings that buyer enquiries are up, and the future of the housing and mortgage market, he added: "It seems that people want to buy but they are either unwilling or unable to. This all adds up to a lot of pent-up demand, which could release quite quickly if the economic conditions become more favourable.

"So whilst it's difficult to argue that the worst of the recession is over just yet, you could certainly say that we could be rapidly heading for the trough.

"Hang on tight for the upswing as it could be coming soon!" he concluded, lending further optimism to the markets.

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