UK signs of a bottom
News Article Date: Wednesday 15th of April 2009
LONDON -- A measure of U.K. property sales adds to recent evidence that the U.K. housing market's slump may be bottoming out.
Sentiment in the housing market in England and Wales recovered to its strongest level in 13 months in March. Average sales per surveyor increased for the first time since late 2007, the Royal Institution of Chartered Surveyors said. The improvement in sentiment occurred even though U.K. residential property sales have dropped by half and prices have fallen by more than 15% on some measures over the past year.
The survey's headline price balance, which is calculated by subtracting the percentage of surveyors reporting falling prices from those reporting rising prices, improved to minus 73.1 in March from a revised minus 78.1 in February. It was the strongest level since February last year.
The price balance had been recovering gradually from a low of minus 94.9 in April 2008, but deteriorated in the first two months of the year.
Surveyors are optimistic that sales will increase, especially for those who have obtained financing to purchase family homes, although the market remains hard for first-time buyers, the Royal Institution of Chartered Surveyors said.
The survey showed the average number of completed sales per surveyor over the previous three months rose to 9.7 in March from a low of 9.6 in February. It was the first increase since October 2007. Still, property sales were down 53% from a year earlier last month.
The poll of 246 offices of chartered surveyors, who in the U.K. offer advice and valuation services on real estate and construction, took place between March 9-23. It suggests the combination of the government's multibillion-pound fiscal stimulus and low Bank of England interest rates is helping the housing market. However, with the country in recession and unemployment rising, a recovery in sales and prices is unlikely to be swift.
Other data also have suggested the housing market's decline is moderating. The latest BOE figures showed mortgage approvals, an indicator of market activity, hit a nine-month high in February, while measures of consumer confidence also have started to recover.
Mortgage lender Nationwide said earlier this month that average U.K. house prices posted their first monthly rise for 17 months in March, although they remained 16% weaker than in March 2008.
The survey showed the ratio of completed sales to the stock of unsold property on the market -- a gauge of market slack and an indicator of future price changes -- rose for the third consecutive month to 14.6% in March from 13.8% in February.
Newly agreed sales increased in March, rising at the fastest pace since October 2006, while confidence in the sales outlook rose for the third consecutive month to its highest level since October last year, the survey said.
Confidence in the outlook for house prices also rose to its strongest level in more than a year, though it remains deeply negative. New buyer inquiries increased for the fifth month in a row, with London registering the strongest rise in interest, the survey said.