Buyers enticed back into housing market

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In its monthly survey of the sector, the Royal Institution of Chartered Surveyors said buyer enthusiasm increased for the fifth straight month in March, with London picking up particularly sharply.

This pickup in inquiries is feeding through into sales, RICS said, even though they remain at historically low levels.

Moreover, RICS said the balance of its members reporting house price falls as against rises dropped slightly in March to 73.1% from 78.1% in February - more or less in line with market expectations.

"Buyer interest is starting to gain real momentum but will remain frustrated while mortgage finance is scarce," said Ian Perry, a spokesman at RICS.

"The market is still in a fragile state but with demand continuing to pick up, there may be more signs of stabilization in the coming months," he added.

The RICS survey adds to the evidence that the British housing market may have bottomed out. The Nationwide building society said house prices actually increased in March for the first time since October 2007, while the Bank of England revealed that the number of mortgages approved in February rose by 19 percent to their highest level since May 2008.

Though unemployment continues to rise in Britain, potential buyers are being enticed by lower house prices - by most indications they have fallen by 20% from their peak - and record low interest rates.

After six consecutive rate cuts, the Bank of England earlier this month decided to keep its benchmark rate at a record low of 0.5%. Most economists think rates will hold stay for most of this year at the very least.

Falling benchmark rates have seen mortgage rates slide even though credit markets remain stuck.