House prices up but weather depresses activity

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.

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.

RICS spokesperson, Ian Perry said:

"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."

Commenting on the RICS survey, Nigel Lewis, FindaProperty.com’s property expert, said:

“Unless you had a team of huskies and a sled, house-hunting was almost impossible in January but the snow didn’t stop people searching online. Demand for housing is very healthy at the moment and the relative lack of supply is pushing prices up. Now the snow and ice has retreated we expect the demand we’ve seen over January to translate into activity during the rest of February and into March. This demand means that unless there is an injection of stock onto the market prices will continue to climb steadily.”

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