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UK housing market slowly improving

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Confidence in the UK housing market continues to grow albeit slowly, according to the latest housing market survey from the Royal Institution of Chartered Surveyors (RICS).

RICS revealed that enquiries from aspiring homebuyers rose in most parts of the UK in November and have now grown steadily since the end of the summer.

Although demand is still at a historically low level, it would appear that those who are in a position to do so are gradually looking to test the market. The number of homes coming onto the market for sale remained fairly flat during November.

Very little movement has been seen in terms of new instructions for over two years.

In terms of prices, small decreases were recorded in most areas. Across the UK, London was once again the only part of the country to see prices increase. Northern Ireland and Wales experienced the most significant drops.

Looking ahead, chartered surveyors are optimistic that activity levels should continue their gentle increase.

The announcement in last week’s Autumn Statement of funding to unlock large sites for house building is a step in the right direction, and the Funding for Lending scheme is beginning to bear fruit for potential buyers. However, the macro economic picture continues to weigh heavy on the market and continues prevent any really significant boost in activity.

Nick Hopkinson, director of property company PPR Estates, said: “UK house prices continue to fall slowly outside the London billionaire bubble. In fact, if you include inflation, prices have fallen by 25%-plus in real terms across most regions since the 2007 market peak. Transaction levels remain 50% below that of a functioning market and lending remains heavily restricted to all but the richest buyers as we end 2012. Well over 1 million households are stuck in negative equity and are now effectively mortgage prisoners in their own homes.

“UK PLC continues to teeter on the brink of recession with further austerity and global economic uncertainty likely to continue for several more years according to even the most optimistic forecasts. Despite the sound-bites, It is difficult to see how Government initiatives to encourage more mortgage lending are either prudent or likely to be effective against such a backdrop. Seller and buyer appetite to do deals is likely to remain very low with 2013 is looking like another year of sales famine for the property market.”

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