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Rise in property inquiries brings hope of recovery
Peter Dominiczak10.03.09
Property buyers in London are flooding back to the beleaguered housing market at the fastest rate since the height of the property boom, new figures reveal today.
London is returning to a buyers' market as sellers slash prices and lenders lower interest rates.
Inquiries from new buyers increased for the fourth month in a row last month, rising at their fastest pace since August 2006, according to the Royal Institution of Chartered Surveyors.
Overall, 20 per cent more surveyors reported a rise in buyer inquiries compared with those who saw a fall, up from 15 per cent more in January, as steep interest rate cuts and falling asking prices continued to tempt buyers back into the market.
Estate agents also reported a rise in interest in traditionally expensive enclaves of London, such as Chelsea, and a return of gazumping.
But despite the upsurge in inquiries the number of sales remains low as buyers can afford to be selective.
The average chartered surveyor estate agent in London agreed only one property a fortnight in the last three months.
Charles Puxley, from estate agent Jackson Stops & Staff, said: "There is no doubt that the number of inquiries has increased recently. However buyers are in no hurry and are happy to dither for ages before making very low offers. Vendors' expectations are still far too high."
Meanwhile, the number of new homes built in England in 2009/10 could slump to its lowest level since 1921, says the National Housing Federation today. It predicts that the figure for the next financial year could fall by 50 per cent compared with this year, to 70,000.
The federation also says only a third of the record-low number will be private while two-thirds of all new properties will be built by housing associations.
Reader views (10)
Ted, I bow down to your superior knowledge, obviously someone not selling a house knows a lot more about the state of the London property market than someone who is. As people's hair tends to stop growing during a recession they don’t get it cut so your barometer for the economic health of Britain using hairdressers is as shrewd as it is infallible and should be used by all economic observers. I don’t agree with your bleak predictions of the future UK economy though, I'm sorry to disappoint you but the banks are fundamentally solvent and despite short term losses due to toxic assets they will recover, as they do there is no reason the general economy will recover too.
- Nj, London
NJ's anecdotal evidence is always valuable, so it definitely shows signs of a change of perception at least.
My own personal view is that the recession still has plenty of legs. We all see it on the news, we all see the job losses, we all know people that have been made redundant. But the slowdown in spending has not really hit yet, that will come in the next 6 months as it starts to hit the accounts of small businesses (and large ones)-it takes time for this to come to fruition. I for one am surprised that my own personal barometer, which is restaurants shutting down, has not really taken hold yet. London is still proliferated with them (and hair dressers too). When you start to notice the shutter boards go up on these in a big way, then you'll know it's starting. People felt that the worst was over last year-they were wrong. We do not know how the banking sector will yet turn out, there are still huge problems in the USA, Europe is close to imploding but has not yet done so-there are plenty more factors in the equation which haven't come into play, so just hold on people! You think a recession is going to be over in a year? You think a country that produces little, where vast numbers work in the public sector and produce nothing (public sector wages are taxes-think of it that way), and a government that decides to take on more debt in order to spend more, amounts to increased confidence and a strong economy? Take away public sector employees, what do you have left?
- Ted, london UK
I looked at the housing market in London.
I just need a Million; then I am going to buy a bedsit.
- Mickyinlondon, london
Can't anyone see the danger over the next five years? Ok prices are coming down and mortgage rates are cheap (if you have the right deposit), but inflation will return with a vengance in 3 - 4 years time which means the BOE will have to raise interest rates sharply and for a long time. This will have the obvious effect making borrowing very expensive which will reduce demand for houses therfore their prices will fall again. It will be like a double dip.
- Dan, Manchester
willing to buy if someone can assure my job for next 5 years...ha..ha..ha..In this market, when jobs cannot be assured even for next 5 months, who would make a investment and risk? Are non-Locals buying in the property market?
- Prasad, sidcup
My own experience suggests this is true. As someone who is selling property last October and November I was lucky to get a single viewing for weeks on end and the only offers I received were derisory. In the last few weeks there has been a positive upturn with so many viewings on a Saturday they are spilling over into weekdays. It shows the demand never went away and now all we need is a resumption of the availability of cheap mortgages to first time buyers and despite what all the doomsayers are suggesting we may well see a recovery in the property market.
- NJ, London
Property industry trying to talk up the market again - whilst banks will only lend 75 - 80% to first time buyers they have to be factoring another 20 - 25% likely fall in prices - potential buyers maybe checking out prices more regularly (my son is on the Rightmove website twicw a day watching new properties, at lower prices everyday) - but his recession has only just started and will probably overshoot on the way down so property fraternity get real, theres going to be no recovery this side of 2011!!!
- edmundb, Banbury, Oxon
Plenty of 'bargin hunters' out there, but I can tell you as a mortgage broker - rates at 85% LTV are still around 5.8% and lenders are very choosy on who to lend to.
- Mortgage Broker N3, London, England
Agree with Rodney. Am one of those looking to move in to a bigger place. I have a deposit of 50K cash and a joint wage power to get a 200K mortgage. Guess what? Accordingly to current asking prices, I can only afford just one bedroom flat in most parts of inner London. Ask the estate agents why they blame the greedy vendors. Ask the vendors they say that's the estate agent evaluation. Truth is, both behive like spoilt children. Forget the estate agents, price your house realistically and more importantly if a secure buyer comes along don't let him/her go: they are very rare these days.
- Giovanni, london
Yeah right - another meaningless report. Get it in your head - we ain't buying any more over-priced under value for money properties - especially in London.
- Rodney, London
