Are property prices in the UK set for a turnaround?

Are property prices in the UK set for a turnaround?

	Published : Tue, 18 Oct 2005 10:50 By : Phil Bateman Print this Story

Survey results from the Royal Institution of Chartered Surveyors (RICS) indicate that the UK’s housing market has stabilised now and is likely to see marginal increase in house prices.

After a hiatus of eighteen months, UK property professionals have something to cheer about; at least perhaps a reason to be less gloomy with hope that confidence will return to the property markets, to some extent anyway.

According to RICS, the cut in interest rates August had given a boost to new buyer enquiries. Though the report says that more surveyors were reporting drop in prices than hikes in September, the degree of decline was said to be at its lowest in one year.

Meanwhile, new buyer enquiries registered an increase for the fourth consecutive month. It is said to be the best improvement seen in past two years. The number of sales also was at a 10-month high.

Ian Perry, Rics' housing spokesman, said: "The upturn in demand and improved outlook on interest rates have led surveyors to predict house price rises for the first time since early 2004 - although these are expected to be small."

Concurrently, Halifax, biggest mortgage lender in the UK reported a 1.2% increase in house prices last month, while August saw an increase of 1.9%.

The RICS survey also endorses the findings of Rightmove, the property website which had reported that a turnaround in housing market is being seen in October after a drop for three consecutive months.

Consequently, property stocks on agents' books rose over the last month. It seems to have put the sellers’ fears of a property crash to rest and made them optimistic about the market really looking up.

According to RICS, the proportion of chartered surveyors reporting price falls for September dropped to 21 per cent from 25 per cent in August. This is supposed to be in line with market expectations. RICS also expects sustenance in the recovery activity owing to continued growth in employment, which should augur well for a stable housing market.

However, regional disparities continue to abound as house prices increase in Scotland. They remained quite stable in East Anglia and the north, while the price falls increased slightly in the south-east and Wales. The market showed decline in the north-west after two months of stability.