House prices fell in January, according to the Royal Institute of Chartered Surveyors (RICS), but by less than in previous months, indicating that the market is showing signs of recuperation following the slowdown over recent months.
According to RICS, the firm economy, continued job creation and the belief that interest rates may have peaked has led to the first rise in agreed sales since April last year. However, the number of sales at completion stage remains unchanged this month.
Although activity appears to be picking up, with a slight decrease in property stock for sale, the choice of available properties is till 16% higher than last year, indicating restrained market conditions. As a result, surveyors anticipate further price declines over coming months.
RICS spokesman Jeremy Leaf is confident that the price falls are over: ?The market has most likely already hit its lowest point and we should see a recovery in activity, though the prospect of further interest rate rises will keep conditions restrained,? he said.
According to RICS? figures, the top end of the market is declining faster than the rest of the market. But Hamptons International begs to differ. Its latest results found rising demand for country houses and top end London properties, especially from overseas buyers.
?The Russians are looking to invest their seemingly endless funds in properties around the £5million price range and within close proximity to major airports. We are also seeing high levels of enquiries from our Middle Eastern clients; as the year progresses we anticipate that demand could reach the high levels of the 1970s,? said Hamptons? Surrey Country Houses Director John Denney.
Hamptons believes that although activity is historically low, the risk of a crash remains unlikely: ?Despite the fall in transactions and activity over the past few months, we have consistently reported our view that the underlying market appears stronger than media reports had been suggesting, with those (albeit fewer) buyers in the market remaining very motivated. Inevitably there will be a lull during the election period in May, but we would expect the market to pick up again afterwards,? said a Hamptons spokesman.
