RICS predicts rise in mortgage approvals on the back of the third monthly increase in homebuyer hopefuls
The number of buyers in the UK housing market has risen for the third consecutive month, as lower prices boost interest, according to figures from the RICS.
In its February housing market survey, the body said that new buyer enquiries had risen steadily since November, with purchasers saying their interest has been renewed by cheaper homes.
The improvement was likely to continue in coming months and mortgage approvals could climb above 35,000 per month as a result, it added.
But it said first-time buyers were still largely frozen out of the market and warned activity would remain subdued.
RICS chief economist Simon Rubinsohn said: “Our suspicion is that this improvement in activity levels is likely to be sustained over the coming months.
“However, this would still be well down on the high for the cycle as well as being significantly below the long run average.
By no means could this relatively small pick-up in transactions be seen as representing a move back to a more orderly housing market
RICS chief economist Simon Rubinsohn
“By no means could this relatively small pick-up in transactions be seen as representing a move back to a more orderly housing market.”
More than 70% of surveyors said low prices were the main factor in driving buyer interest and almost half said buyers think the bottom of the market is now in sight.
Around three-quarters of surveyors said existing homeowners were driving the jump in enquiries while just 23% reported increased interest from first-time buyers.
Figures from the Halifax and Nationwide show house prices have fallen by around 20% since their peak in 2007, but the RICS said many surveyors thought the fall was closer to 30%.
Rubinsohn added: “Interest from owner-occupiers is likely to persist over the coming months as those with large deposits look to capitalise on the drop in house prices.
“However, a sharply deteriorating employment picture may eat away at this improvement in sentiment, pushing potential buyers back to the sidelines.”