Key points:
New instructions and the stock of unsold properties both fall Sales expectations and price expectations both improve, but the latter measure is still extremely negativeThe seasonally adjusted balance of surveyors reporting falling rather than rising prices deteriorated again slightly from 76.6 in January to 78.3 in February.
On the demand side, new buyer enquiries increased for the fourth consecutive month and at the fastest pace since August 2006.
However, newly agreed sales and completed sales per surveyors both fell back marginally.
Although underlying activity remains weak, the turnaround in enquiries indicates that some level of buyer interest is returning to the market.
This can be explained by the sharp cuts in interest rates as well as the decline in house prices; both of these factors have improved affordability.
As for supply, the stock of unsold property on surveyors' books fell from 75.3 to 69.5 in February.
Stocks are now 23.4% down on year ago levels (this time last year they were up by 48.2%).
Stock levels have been falling over the last year because vendors have turned to the rental market, opting to let their properties during the current climate.
Falling stock levels also coincide with falling new instructions, which declined for the second consecutive month and quite significantly so (although not as sharply as in January).
Given the proportionally larger fall in stocks than in sales per surveyor, the sales to stock ratio – a gauge of market slack and a lead indicator of future price changes – increased for the second consecutive month from 13.1% to 13.6%.
Nevertheless, the sales to stock ratio is still close to December’s all time low of 12.9%.
Confidence in the sales outlook improved slightly but it remains below the survey’s long run average.
Confidence in the price outlook improved slightly but it is still extremely negative.
From a regional perspective, the price balance improved in London, East Anglia, Wales, the North and the West Midlands. Everywhere else, including Northern Ireland and Scotland, the price balance deteriorated.
With the exceptions of the East Midlands, Yorkshire and Humberside and the North West, sales expectations are now positive across all regions in England and Wales.
Price expectations improved across all regions in England and Wales, with the exception of the West Midlands.
