House sales set to rise for next three months

HOUSE sales across the North West are expected to increase over the next three months, thanks to a modest improvement in the availability of mortgage finance.

According to the latest RICS (Royal Institution of Chartered Surveyors) UK Residential Market Survey, 45% of respondents are predicting sales will continue to rise across the region now up until the end of the year.

Across the UK, agreed sales rose at the quickest pace in September, since May 2014, with the North East, East Anglia, and Scotland posting the sharpest rises in activity.

The East Midlands and Yorkshire and Humber were the only two regions to see a drop in the number of house sales during the month of September.

The reason many chartered surveyors in the North West anticipate stronger sales across the next three months is broadly due to an increase in mortgage approvals.

Recent lending data, including that highlighted by the Bank of England, showed mortgage approvals at an 18-month high and up 12% compared to a year ago.

As the availability of mortgage finance appears to be improving, the average ‘perceived’ LTV (Loan to Value) ratio captured by respondents to the RICS survey edged up to 79.3% with first time buyers seeing credit conditions relax most noticeably during September.

Although activity in the region looks like it could pick up, the ongoing lack of new houses coming on to the market for sale and the limited stock of homes available for sale, remain obstacles for the sustainability of the market.

The number of new instructions in the North West has continued to fall throughout the year.

Significantly, 40% of respondents feel the biggest factor behind the negative trend in new instructions is the lack of stock for sale, which is deterring would be movers as they struggle to find a suitable property to move on to.

The next most cited influence was economic uncertainty, followed by stretched affordability.

As a result of the persistent supply demand imbalance, 54% of chartered surveyors in the North West expect house prices to rise over the coming three months.

In the lettings market, tenant demand remained strong with 45% of North West respondents reporting a rise for rental properties. Consequently, 36% of chartered surveyors in the region expect rents to rise over the coming months.

Chris Cockwill, of Cockwill & Co Estate Agents in Southport said: “September was busy during the early part, but activity slowed towards the end of the month. There’s still a shortage of stock coming on to the market and as a result vendors are pushing up asking prices, but buyers are not getting drawn into it.”

Simon Rubinsohn, RICS chief economist, added: “Activity is now picking up which is encouraging, but unless the stock being sold is replenished, there is a limit to how sustainable this modest improvement in market turnover will prove to be.

“And, unfortunately, the indications are that we are locked in a cycle where the lack of available properties on agents’ books is itself deterring some potential vendors from thinking about putting their own property on the market.”