The property market has seen the strongest demand from buyers since February 2022, after enquiries increased 7 per cent in January.
The Rics UK Residential Market Survey showed this marked a bounce back from December, when buyer demand was down 3 per cent.
The increased demand was attributed - among other factors - to anticipated future interest rate cuts by the Bank of England.
Agreed sales, having fallen by 5 per cent previously, were also reported to have increased by 5 per cent over January.
Rics UK reported a positive sentiment within the market with 14 per cent of respondents predicting that, on balance, sales will pick up over the next three months.
Positivity increased for the longer term with 44 per cent believing sales volumes will increase over the next 12 months.
Tarrant Parsons, senior economist at Rics, said: “The UK housing market has seen a continued improvement in buyer activity through the early part of the year, supported by the recent easing in mortgage interest rates.
“Although sales volumes through much of the year ahead are likely to remain relatively subdued compared to the longer-term average, the outlook has now turned modestly brighter on a consistent basis over the past few survey reports.”
However, Parsons acknowledged mortgage affordability was still a “significant” challenge and that any further “unwelcome” surprises with regards to inflation may still cause interest rate expectations to be revised.
“That would then pose a significant risk to any prospective recovery in the months ahead, even if the current prognosis is for the market to see a further pick-up in activity levels.".
House prices
Rics UK’s research also examined house prices, showing they had returned a result, at a national level, of -18 per cent, indicating continuing price falls overall.
However, it clarified this result had strengthened for five successive months, and still represented the strongest reading since October 2022.
It also provided insight on house prices by region, identifying London as standing out by exhibiting a more stable trend for prices over January.
On the other hand, respondents based in Scotland and the North West of England cited a generally flat picture in recent months.
Lettings
Meanwhile in the lettings market, 28 per cent of contributors reported seeing an increase in tenant demand in the three months to January.
However, RICS UK acknowledged this rise was the most “modest” since January 2021.
tom.dunstan@ft.com
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