Signs of housing sales activity again

There are signs the housing market is picking up, according to a survey of surveyors, with modest improvements in enquiries and sales recorded.

The Royal Institute of Chartered Surveyors (Rics) housing market study for July shows the net balance of surveyors reporting falling rather than rising prices edged up for the third month in a row, from 86.9 to 83.9.

New buyer enquiries and newly agreed sales series also improved for the third consecutive month.

In addition, Rics said although repossessions picked up during the first half of 2008, the rate of repossessions (as a proportion of the total mortgaged housing stock) is still low and broadly comparable to that in the late 1990s.

RICS spokesperson Ian Perry said: "The lack of mortgage finance has brought the housing market to a virtual standstill with first-time buyers rapidly becoming an endangered species.

"Going forward, there are signs that sales activity might pick up a little as sellers start to re-evaluate unrealistic asking prices. However, the current confused messages from the government regarding stamp duty risks damaging any returning confidence and may discourage mobility."

The July survey suggests activity may be beginning to stabilise, albeit at a low level, the group said.

The net balance of surveyors expecting a drop in sales over the next three months edged up again to -5, from -6 in the previous month. Meanwhile, price expectations broadly remained unchanged at the highest level since February.

In June, surveyors reported that 'predatory buyers' were bargain hunting for property. This month, surveyors have reported that 'realism' has returned to the market with many sellers dropping asking prices to more realistic levels.