Economic uncertainty holding back housing, survey finds

back the housing market more than a lack of mortgage finance or house price fall
Most surveyors feel uncertainty in the economy is holding back the housing market more than a lack of mortgage finance or house price falls.

In the latest Royal Institution of Chartered Surveyors (Rics) UK Housing Market survey, nine out of ten (89%) surveyors said uncertainty in the economy was holding back activity in the housing market and preventing any meaningful recovery.

This figure is up from 79% in the same survey three months ago. 70% of those surveyed also cited availability of mortgage finance as a factor holding back the market, while fear of house price falls was cited by 42% of surveyors as a contributing factor, a figure that has remained relatively stable over the past few months.

The good news is that demand for property in the UK rose last month, as 7% more surveyors reported new buyer enquiries rose rather than fell during November. This was the third consecutive monthly increase for the series, and the first time since the spring of 2010 that the series has been in positive territory for three months in a row. 

Greater buyer confidence was also reflected in an improvement in the level of sales transactions. Newly agreed sales rose, with 14% more respondents reporting sales increased rather than decreased (from 9% more in October).

Alongside this, the average number of sales per surveyor (per branch) climbed to 15.4 in the three months to November - the best level since September 2010. 

Commenting on the survey, Rics housing spokesperson Alan Collett said: “It is encouraging that buyer interest has edged upwards in the face of the endless diet of negative news from Europe and the turmoil in financial markets. However, a meaningful recovery still seems some way off.

“While the proposed mortgage indemnity scheme is clearly likely to provide some assistance for the market and is to be welcomed, its focus on the new build sector will inevitably mean that it only offers support for a relatively small share of the market.” 

Today, Peter Bolton King, chief executive of the National Association of Estate Agents, has also warned first first-time buyers must act quickly in order to avoid paying Stamp Duty Land Tax on their home purchase.

He said: "From March 2012 the holiday is well and truly over for first-time buyers. Once the government ends the tax exemption, they will face a tax of three per cent on all home purchases over £250,000.”