House Price Balance Turns Positive

The latest UK housing market survey from the Royal Institute of Chartered Surveyors (RICS) indicates that the house price net balance turned positive for the first time in two years. The net balance of surveyors who reported rises in prices rather than falls reached a positive number of 10.7 percent from the previous balance of negative 5.7 percent. This is the highest positive reading since May of 2007, when the net balance was 24.8 percent.

The survey from RICS indicated that the overall average has been helped significantly by reports from the South of England. Surveyors are reporting price rises, instead of falls, in London of 43 percent and the south-east of 39 percent. The pace of improvement did slow in August, though. The balance of surveyors who reported an increase rather than a decrease went down in August to 49 percent, from 61 percent in July.

The number of sales per surveyor over the last three months was greatest in the East, with 22 per surveyor, and the West Midlands, with 19 sales each. The national average now stands at 17 sales per surveyor, and London had the lowest number of sales with 12 per surveyor.

Jeremy Leaf, spokesman for RICS, said of the latest report: “Although it is clear that house prices are now rising, it continues to be the lack of supply that is underpinning the recovery in most parts of the country. The more positive news flow will gradually encourage vendors to start putting property back on the market. This development should enable more potential purchasers to find desirable properties to buy but it could also present a challenge to the firmer trend in prices particularly when interest rates finally begin to move upwards.”