Housing market sees rise in activity

The UK housing sector saw an increase in activity during October, as sales levels rose and demand edged up, according to the latest RICS UK Housing Market survey.

During October, 8% more chartered surveyors reported newly-agreed sales rose rather than fell, representing a rebound in activity after the past month's dip (-3%).

Although still at historically low levels, this rise represents the best reading since April 2010. Some surveyors attributed this increase to growing realism from many sellers, who appear to be more willing to take offers in order to secure a sale.

Completed sales also rose slightly, to an average of 15 per surveyor (by branch) over the past three months. While still muted, this represents the strongest level since April (15.1). However, respondents note that if buyers are able to access finance, banks are taking a long time to agree lending terms, which is slowing down the purchase process.

New buyer inquiries which are a good indicator of buyer demand, edged up to a net balance of +7% (from +4 in September). Meanwhile, new instructions (which highlight supply levels) also increased, moving from a net balance of -4% to +3% in October. Surveyors added that uncertainty in Europe spilling over to UK economy and restricted mortgage availability are still impacting on the market, resulting in caution from buyers.

Prices continue to remain in negative territory, and dipped slightly in October, with 24% more surveyors reporting prices fell rather than rose (from 23% more in September). However, more than half of all respondents indicated that prices were stable and of those reporting a decline, almost three quarters suggested the extent of the fall was between 0 and 2%.

Regionally, London continues to be the only region recording rising prices at the present time; it is also the only area where the price expectations net balance is positive. By way of contrast, new buyer enquiries and sales expectations appear to be edging upwards across rather more of the country, with demand for property strongest in the South East and the North West.

RICS housing spokesperson, Ian Perry, said: "It is encouraging that activity levels appear to have edged upwards over the past month. Indeed, chartered surveyorsare generally upbeat about the near term prospects for transactions.

"However, with the chaotic events in the euro area threatening to spill over to the UK and banks still imposing tough conditions on loans to first time buyers, any recovery in sales is still likely to be relatively modest. This will inevitably leave many people who would like to own a home unable to access the market."