Potential househunters in London and the South East are delaying plans to move while they wait to see which way the market will go, according to the RICS.
The RICS housing market survey for the final quarter of 2002 shows prices rising in all regions except London, where a slight fall is recorded.
After seasonal factors are taken into account, the RICS said that the figures suggested that the London market has stabilised. It said that this points to a soft landing for the UK housing market, rather than the feared crash.
London’s decline in buyer activity has been driven by intense speculation in December over the direction the market will take.
If prices show signs of falling, potential purchasers are likely to continue to hold back in anticipation of a further slide. If prices remain stable or rise, activity will pick up as more buyers move in.
Prices outside London are still increasing however.
In the South East and East Anglia rises are relatively small, with the net balances of RICS members seeing an increase of 19% and 31% respectively.
Price rises were more widespread in the West Midlands (44%), while the market across the northern regions and Wales is still seeing boom conditions, with net balances upward of 60%.
Stocks of houses for sale on chartered surveyor estate agents’ books are up on the same period, but still at historically low levels.
It is the shortage of supply combined with low interest rates that has sustained recent market conditions.
RICS national housing spokesman Ian Perry said: “The market in London and the South East is delicately balanced, with a definite sense of caution among buyers.
“However, there is no sign of a market crash in the offing as some reports suggested last month, with other regions still experiencing strong increases in values.
“In market trends the rest of the country lags behind London, so if the capital sees a soft landing in the housing market other regions are likely to follow later this and next year.”
EGi News 23/01/03
