House prices rise again but weather depresses activity

House prices rose again in January but buyer interest and new instructions to sell property fell as bad weather hit activity in the market, according to the latest RICS UK Housing Market survey.

In January, 32 percent more Chartered Surveyors reported a rise than a fall in house prices up from 30 percent in December. However, the net balance of surveyors reported that buyer enquiries fell for the first time in 14 months while new instructions dropped for the first time in seven months. 20 percent more chartered surveyors reported a fall than a rise in new buyer enquiries down from a positive reading of 18 percent while a net balance of five percent of surveyors saw a decline in new instructions which compares with a positive balance of 15 percent in December.. The bad weather clearly had a negative affect upon business with newly agreed sales also falling for the first time in ten months.

However, surveyors are optimistic that these negative signs are a reflection of the extreme weather conditions experienced in the early part of the month. The number of surveyors expecting house prices to rise increased from 12 percent to 24 percent while the number of surveyors expecting sales to pick up over the next three months rose from seven percent to 24 percent in January.

Transaction levels fell slightly in January. The number of sales per surveying firm fell from 19 to 18 while the closely watched sales to stock ratio - a measure of market slack and a lead indicator of future prices- fell for the second successive month.

Commenting, RICS spokesperson, Ian Perry said: "The cold snap in January clearly has a huge impact upon both supply and demand in the housing market with activity coming to a halt amidst the seasonal chaos. Activity and interest is likely to pick up in the coming months as the market experiences a spring bounce.

"House prices are likely to rise in the short term but if more supply continues to come onto the market, it is possible that the market will run out of steam in the latter part of the year."