This is according to RICS’ Housing Market survey for May. New instructions to sell property declined for the fifth consecutive month and at the fastest pace since last June, which reflects the continued absence of distressed sales. This is consistent with both the low level of mortgage arrears and the high level of employment at the present time.
Nevertheless, due to the continuing weakness in sales per surveyor the ratio of completed sales (over the past three months) compared to the stock of unsold property on the market fell to 19.3. Although this indicator of market slack has now slipped through the levels touched in 2005 it remains comfortably above the lows seen in the early 1990’s when it briefly dropped to 11.4.
New buyer enquiries remained firmly in negative territory in May. A further reduction in mortgage availability coupled with continued negative news flow discouraged interest in the market. Significantly, however, the pace of decline in new buyer enquiries slowed, reversing all of last months declines.
In terms of the outlook, the May survey provides a few encouraging signals. Confidence in the sales outlook improved fractionally. Furthermore, confidence in prices rebounded back from last month’s low, although there is a still widespread perception that prices will fall further in the near term.
