Mixed Messages for property for sale from Rate Rises
14th June 2007
The property market is showing unexpected signs of strength, according to a new survey by the Royal Institution of Chartered Surveyors which suggests that four interest rate rises have still not dampened consumer demand for property. However,Sales and marketing director at Esate Agents Manning Stainton.of Leeds And Wakefield has other ideas.
The number of new house buyers looking for homes has jumped, according to the Royal Institution of Chartered Surveyors. The bounce in the closely watched statistic is a clear sign that the housing market slowdown has not yet arrived, economists said.
RICS said after a series of recent drops its barometer measuring new house buyer enquiries rose back up to -1 points. The statistic has been under close watch recently since economists believe it is a reliable indicator of future movements in house prices
Its improvement will come as a surprise, following as it does a raft of signs that, after more than 18 months of strong expansion, property prices are starting to flag.
Royal Institution of Chartered Surveyors spokesman Jeremy Leaf said: "The stabilisation in property buyer enquiries sends a clear signal that house buyers are undeterred by recent interest rate rises. However, the full impact of rising rates is yet to be felt and buyers tempted by the recent strength of house price rises may need to exercise caution.
"With rates expected to rise even higher and some home owners fearing the end of fixed rate deals, affordability conditions are set to worsen across the board and will herald a cooling market."
Nevertheless, the Royal Institution of Chartered Surveyors said its members reported that house price inflation is still dropping. Its measure of price rises dropped from 47 points to 33 points in May.
In a clear sign that the proposed introduction of Home Information Packs had caused a flood of properties to be put on the market for sale, Royal Institution of Chartered Surveyors reported that the number of new properties to sell increased at the fastest pace in the survey's history.
The Department for Communities and Local Government has since delayed their introduction from June to August, and severely limited the number of applicable homes.
"Conditions in the market have loosened as sellers sought to avoid the up-front costs of the recently delayed HIP," said Mr Leaf. "However, the surge in supply will be short lived, although owners of four-bedroom properties may decide to enter the market before the next deadline on August 1."
On a more local level estate agents Manning Stainton shared the experience of a huge surge in new properties for sale coming to the market in May but have since seen the number of enquiries from buyers fall. Viewing levels have also fallen in June despite numbers of property for sale increasing by 25%.
“We believe that there is a clear sign that the recent interest rate rises have had a dampening effect of the property market across Leeds, Wetherby, and Wakefield.” Says Sales & Marketing Director, David Pank, of estate agents Manning Stainton.
