Housing market improving steadily

RICS reaction to Inland Revenue property transaction figures - July 2005

RICS economist, Milan Khatri commented: "Figures released by the Inland Revenue today (21st July), show that the number of property transactions were at a seasonally adjusted 123,000 in June, up 3,000 from May, and at their highest level since February. However, compared to the same period in 2004, property transactions are still down 21.2%.

"Inland Revenue figures record officially registered transactions (incorporating both residential and commercial property), and can take place up to 14-16 weeks after a sale is agreed. The figures encompass both cash and mortgage finance purchases.

"The figures show that transaction levels have now started to rise gradually, up from 351,000 sales in the first quarter, to 359,000 sales in the second quarter of 2005. It is likely that sales activity will show a further modest improvement in the second half of the year as likely interest rate cuts will improve affordability conditions.

"More timely RICS statistics found that June's new purchase enquiries from would-be buyers showed the strongest increase in 18 months, as fears over further interest rate rises have faded. RICS expects a modest upturn in housing activity to continue, but the cooling economic climate means interest rate cuts will not spark a renewed housing market boom. "