The RICS UK Housing Market Survey for March has been released today. It shows that there is a trend moving towards price stabilisation.
The net price balance advanced from -13 to -10 in March. This means 10% more surveyors reported falls than those reporting price rises. This is the least negative reading since June 2010. 67% of surveyors reported that there was no change in prices. Of those that are reporting price falls, 79% report minor falls of up to 2%. This suggests that the negative reading is reflecting only minor change.
The Survey also shows an increase in activity. There is a modest improvement in newly agreed sales and new buyer enquiries. The new buyer enquiries net balance rose from 3 to 9. The sales-to-stock ratio rose in March from 22.9% to 23.3%. This is below the long run average of 33%, but is the best reading since September 2010.
Price expectations of surveyors fell slightly in March. The net balance for price expectations in the next three months fell from 0 to -2. The net balance for price expectations in the next year fell from 11 to 9. This means 9% more surveyors expect there to be a rise in prices in 12 months.
The regional picture shows that London is the only area showing price increases. The area where most surveyors are reporting price falls is the East Midlands.
The commentary to the survey suggests that several reasons can be put forward for the improving figures. The first is the expiry of the stamp duty holiday for first time buyers at the end of March. The second reason given is the warm weather last month. It is argued that as the weather was unseasonably warm, the adjustment procedure will not fully remove seasonality levels. A final reason is that surveyors are factoring in less economic risk, believing the economy to be on a stronger footing.
Simon Rubinsohn, RICS chief economist commented:
“Demand saw a slight boost in March as many first-time buyers looked to beat the stamp duty holiday deadline. There has been a gentle increase in activity across the market in the early part of the year but it remains to be seen is whether this can continue, given the changes in the budget and ongoing problems affecting the economy."
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