UK property recovery underway says RICS latest survey report

This recent property news was posted by the Property Wire last July 9, 2013. This article is about the ongoing recovery of the UK property market according to the RICS survey.

The UK residential property market is recovering with prices rising and demand increasing, according to the latest survey report from the Royal Institution of Chartered Surveyors (RICS). Some 21% more chartered surveyors reported prices rose rather than fell in June, making this the strongest month for house prices since January 2010. The outlook for future prices is also strong with a net balance of 23% more respondents reporting that prices will rise rather than fall over the coming three months. RICS says that the rise in prices has mainly been fuelled by increasing numbers of prospective buyers returning to the market. Last month, a net balance of 38% more chartered surveyors reported a rise in new buyer enquiries. In a clear sign that market confidence is gradually being restored, and that funding schemes are making a difference, demand from prospective buyers has now risen month on month since January and is currently showing its fastest rate of growth since August 2009. Reflecting this slightly more positive mood, surveyors also expect home sales to rise over the coming three months, with a net balance of 45% more respondents predicting sales will increase, up from 36% in May. This is the most positive reading in this series' history, which began in April 1999.  Despite the increasing appetite to purchase property and the added support to do so, the rental market continues to be important in providing housing. Overall demand for rented property actually rose slightly during June, to a net balance of 27%, up from 21% the previous month. ‘After what has seemed like a very long wait we are finally starting to see what looks like the beginning of a recovery in the housing market,’ said Peter Bolton King, RICS global residential director. ‘It is important to remember that activity levels still remain depressed by historic standards but the various initiatives designed to encourage the provision of finance into the market do appear to be paying dividends,’ he pointed out. Brian Murphy, head of lending at the Mortgage Advice Bureau (MAB), pointed out that the current lending climate is also helping the UK property market on it way to recovery. 'Credit conditions have improved and the outlook is bright for the second half of the year. It will encourage everyone with half an eye on a property purchase to see that surveyors are more optimistic about increased sales than they have been since April 1999,' he said.‘Despite the increased interest in buying a property, our numbers continue to show that demand from would be tenants remains firm and that rents are likely to continue to edge upwards over the next twelve months. As the cost of shelter moves higher, it is absolutely critical that the government continues to focus on its role in supporting the delivery of more new homes into the market,’ he added. Christopher Down, chief executive of Hearthstone Investments described the RICS figures as very encouraging and showing that the UK housing market recovery is going from strength to strength. 'The fact that nearly a quarter of chartered surveyors have predicted further price rises over the coming three months is evidence of confidence and optimism in the market,' he pointed out. He also said that the increase in prospective first time buyers indicates a positive impact from government initiatives such as First Buy. 'However it is essential that this surge in effective demand is met by an increased investment in housing from other sources of capital. Even if the First Buy scheme were fully utilised and delivered £3.5bn of new equity loans, it would still fall far short of having any real impact on new home construction, given an annual requirement of up to 240,000 homee,' he explained. 'The real volume of new investment in the UK’s housing will need to come from institutional investors. If both first time buyer stimulus from the government and action within the institutional investment space are taken, then we may actually see overall construction begin to meet effective demand, which in turn will stabilise house price growth toward long term fundamentals and avoid the much discussed bubble,' he added. By: Property Wire Article Source: http://www.propertywire.com/news/europe/uk-property-market-recovery-201307097985.html