West Midlands house prices rose again in January but activity in the market fell as bad weather swept across the region, according to new research by the Royal Institution of Chartered Surveyors.
In January, 19 percent more chartered surveyors in the West Midlands reported a rise rather than a fall in house prices, up from a negative four percent in December, according to RICS UK Housing Market survey.
However, researchers found that six percent more surveyors reported a fall rather than a rise in new buyer enquiries, down from a positive reading of three percent last month.
Meanwhile, a net balance of 12 percent of surveyors saw a decline in new instructions down two percentage points from a negative balance of 10 percent in December. Newly agreed sales also fell substantially.
However, West Midlands 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 dramatically to a positive 22 percent from a negative six percent. What’s more, the number of surveyors expecting sales to pick up over the next three months also rose substantially from 12 percent of surveyors who expected a fall to 20 percent who are expecting a rise in January.
Richard Franklin, of Franklin Property Consultancy and RICS West Midlands spokesperson, said: “The cold snap in January clearly had a huge impact on the West Midlands housing market with activity coming to a halt amidst the seasonal chaos. The indicators are that this will merely defer this activity until the coming months. January was also the first month impacted by the restoration of the Stamp Duty threshold so a positive outlook after this bottleneck bodes well.
“House prices are likely to continue rising in the short term but if supply increases, this could curtail significant rises during 2010. Increased volumes rather than the headline prices should be the key barometer to assess market recovery during the forthcoming year.”
Transaction levels in the West Midlands region fell slightly in January, with the number of sales per surveying firm dropping from 24 to 23, compared to a national average of 18.
Nationally, 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.