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Low availability supports house prices

July 16, 2009

With seemingly contradictory reports coming out on a regular basis, making sense of house price patterns has been a difficult task of late. The Royal Institution of Chartered Surveyors released their UK-wide housing market survey on Tuesday, and the headline conclusion to be drawn is that a continuing shortfall in properties joining the housing market is actually helping to underpin prices, through the simple economics of supply and demand.

House price data can be convoluted, and the 20-page RICS survey certainly goes into extensive detail about property price trends, with a total of 42 graphs and 14 tables representing property prices for various regions of the UK. In Scotland, the data showed that 2009 has seen a sharp rise in buyer enquiries and instructions, as well as steep increases in the volume of sales and the prices achieved. During June, a balance of four per cent of surveyors reported prices falling, although 82 per cent of survey respondents described prices as having stayed the same.

Other key findings of the RICS survey included new buyer enquiries increasing at the fastest pace in the survey's ten-year history, while confidence in price expectations turned positive for the first time since May 2007. As for the aforementioned stock levels, the average stock of unsold property on surveyors books fell from 58.5 to 56.9, representing a drop of almost exactly one third from the same period a year ago. The RICS described their own findings thus: "The June survey provides more evidence that activity in the housing market is recovering, albeit from historic lows. New buyer enquiries have now increased for eight months in a row."