There are signs of increased buyer interest in the still depressed housing market. But this is yet to translate into a house price 'bounce'.
Enquiries up
The latest optimistic signs come from the Royal Institution of Chartered Surveyors (RICS). There was a 16% increase in new buyer enquiries in January compared to December, reports RICS. It says that with house prices and interest rates now much lower, those with cash and access to finance are looking for cheap purchasing opportunities.
Surveyors are looking on the bright side. There are now 10% more surveyors who expect prices to rise than expect to see prices fall in the coming months. Anticipation by surveyors is strongest in London and the South East, while Wales is seeing the biggest increase in buyer interest.
Jeremy Leaf of RICS says: "The latest survey provides further evidence of the eagerness of buyers to try and pick up bargains. This interest has yet to translate into sales, but transactions may pick up in the coming months if the Government follows through on its recent announcement and introduces guarantees for the issuance of residential mortgage backed securities. The latest cut in interest rates may improve confidence for those on the margins, encouraging buyers looking for more attractive finance deals."
However, as Leaf indicates, RICS' survey also shows the actual number of house sales has barely moved in the last three months. Indeed, there was a slight fall in transactions per surveyor in January against December.
Healthy sign
The National Association of Estate Agents (NAEA) is also reporting a significant interest in house buying - particularly amongst those looking for first time purchases. First time buyers made up 22.5% of enquiries in January, against just 10% the month before. The NAEA believes that this is a healthy sign, reflecting much improved housing affordability.
Peter Bolton-King, chief executive of the NAEA, explains: "This figure is highly significant in terms of demonstrating an increase in consumer confidence. The NAEA views FTBs as the bedrock of a healthy housing market. During the boom years we saw the number of FTBs as a proportion of buyers rise as high as 37% and I believe that an average of 25% is indicative of a healthy and confident market."
Bolton-King adds that the figures "suggest that those infamous green shoots of recovery may not be as far off as first thought". The NAEA's statistics also confirm the RICS commentary that people already owning properties and with cash are looking to buy properties at bargain prices.
Mortgage lending still falling
But the NAEA warns that any property market recovery cannot be sustained without greater mortgage lending. And figures from the Council of Mortgage Lenders point to continuing problems. Gross mortgage lending in December fell yet further - down 11% from November and a substantial 47% reduction on a year before. December's total lending of £12.6bn was the lowest since April 2001. Total lending for last year was 30% less than in 2007.
Confusion about the outlook for the housing market was compounded by contradictory figures on prices from the Halifax and the Nationwide. According to the Nationwide's figures, house prices fell on average by 1.3% in January. But Halifax's statistics recorded an increase in the month.
Halifax's housing economist Martin Ellis says: "There was a 1.9% increase in average UK house prices in January, offsetting December's 1.6% decline. Prices in the three months to January compared to the preceding three months, which provides a better indicator of the underlying trend, were 5.1% lower."
Ellis explains that people should not put too much weight on one month's figures. There are still further negative pressures on housing prices, he suggests, from falling incomes, rising unemployment and the lack of available mortgages. But, more optimistically, he notes: "There are some very early signs that market activity may be stabilising, albeit at quite a low level."
But despite the positive indicators, it is too early to celebrate an improved 2009 for the housing market.