7:20am Wednesday 21st March 2012
By Neil Thwaites
“Gonna take a sentimental journey, gonna set my heart at ease, gotta take that sentimental journey, sentimental journey home”.
The nostalgic tune Sentimental Journey was written by Bud Green, Les Brown and Ben Homer in 1944. The vocal was sensitively done by Doris Day, despite unfounded fears of the extreme vocal ranges required. It was recorded by the Les Brown Band and even now, many years later, the song still pleases... and still calls to mind the names of Les Brown and Doris Day.
For me, the housing market will always be entwined and affected by good old fashioned sentiment.
The Royal Institution of Chartered Surveyors (RICS) housing market survey is the longest-running monthly survey of house prices in the UK, collecting data since January 1978. And as such, to my mind, it is the definitive reference point that reflects the mood of the market. Indeed, the survey is cited by the Bank of England's monetary policy committee at its monthly interest rate setting meetings.
The RICS question on measuring house price changes is as follows: "indicate by how much average house prices have changed over the last three months.” (answers being - falling, the same or rising).
In the latest RICS UK Housing Market Survey February 2012, expectations for future prices saw a considerable turnaround with surveyors reporting a net balance of 0% (compared with -14 in January). This is the first time since May 2010 that respondents have not been predicting further price declines. Given the recent upturn in interest from first-time buyers looking to beat the stamp duty exemption deadline, it would appear that surveyors are slowly becoming less pessimistic over prices.
Alongside this, transaction levels continued to edge up with the average amount of sales per surveyor (by branch) moving up to 16, an increase of almost 4% over the last three months. Although still historically low, this is the most positive reading since September 2010 and suggests that the improvement in activity seen in recent months is continuing.
In spite of this more positive trend in sales, prices across the UK continued to dip during February, albeit at the slowest rate for over a year and a half. 13% more chartered surveyors reported price falls rather than rises in the last month. Regionally, London was again the only part of the country to see prices increase, while surveyors in the West Midlands and Northern Ireland saw the least positive readings.
Looking ahead, with a less pessimistic outlook surrounding future prices, surveyors expect transaction levels to continue to rise. A net balance of 20% more surveyors predict sales to increase over the coming three months.
With the recent upturn in activity brought on by the end of the stamp duty holiday, it seems that a renewed sense of optimism may be slowly returning to the property market. Chartered surveyors' price predictions were more optimistic in almost every area of the country in February. So, these are encouraging signs for sure – particularly when you consider they are derived from well-respected housing professionals.
All we need now is more buyers who are best summed up by a 1950s top ten hit for Ms. Day - “ready, willing and able”.
Neil Thwaites Westfields Property
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