Buyer enthusiasm continued to grow in February with interest in London at a high not seen for more than two years, according to the Royal Institute of Chartered Surveyors' (RICS) UK housing market survey.

Interest in the market increased for the fourth consecutive month. 20% more Chartered Surveyors reported a rise than a fall in new buyer enquiries up from 15% in January. Interest is strong in nearly every region with London and the south of England leading the way. In fact interest in London reached levels not seen since October 2006. 44% more Chartered Surveyors reported a rise than a fall in new buyer enquiries in London up from 25% in January. The rise in interest reflects both the drop in asking prices and continued interest rate cuts. As house prices fall, those with finance are looking to pick-up up bargains

-- Advertisement --

However, this pent up demand has not yet translated into sales. The average number of transactions per agency (over the last three months) is now at 9.5, a drop from 9.8 in November, and the lowest figure since the survey began in 1978. London agents are experiencing the worst transaction levels with, on average, only six properties sold per agency over the past three months. The balance of surveyors reporting house price falls increased slightly in February with 78.3%more Chartered Surveyors indicating a fall than rise in house prices, from 76.6% in January.

Commenting, RICS Spokesperson Jeremy Leaf said: "Potential buyers continue to come through estate agency doors but without mortgage finance transaction levels are likely to remain close to all time lows. Worryingly, the lengthy process of obtaining mortgage finance, even for those with large deposits, is contributing towards the blockage in the market place. Family homes remain in demand but flats are proving harder to sell in many areas as first-time buyers are struggling to gain a foothold on the property ladder."

(CD/JM)