February Housing Supply Outstrips Demand

The Royal Institution of Chartered Surveyors said the number of people selling their home rose more quickly than the number of potential new buyers entering the market for the second consecutive month.

It comes after key market surveys by Nationwide and Halifax showed house prices fell in February for the first time since the onset of last summer.

The RICS findings suggest the previous imbalance between supply and demand, seen as a key factor supporting the recent house price recovery, is being redressed.

The group said both new instructions to sell and new buyer inquiries rebounded during February after being depressed in January due to the bad weather and the end of the Government's stamp duty holiday.

Overall, 7% more chartered surveyors reported a rise rather than a fall in new buyer inquiries, while 15% more saw an increase in new instructions to sell property.

A balance of 17% of surveyors also said they had seen house price increases during the month, although this was down from 31% more in January.

However, it remains to be seen whether the price drops are the result of one-off factors during January or the start of a new trend

RICS spokesman Jeremy Leaf said: "Most market indicators are still positive and consistent with further house price increases.

"However, the magnitude of the gains going forward is likely to continue to ease reflecting the fact that new supply coming onto the market is starting to outstrip fresh demand."

The RICS data was unveiled as Rightmove released research which showed only one in four people planning to buy a home during the coming year are first-time buyers.

The proportion of people who plan to buy a property who are first-time buyers dropped for the second consecutive quarter to 25.8%, the property website said.

Rightmove warned the figure was well down on the 40% of housing transactions that would usually be carried out by people buying their first home in a healthy market.

Miles Shipside, commercial director of Rightmove, said: "First-time buyers play a crucial role in keeping the market moving by helping to complete chains, and their continued absence delays any prospect of a meaningful market recovery."

Article from: Sky News.co.uk 09/03/10

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