RICS: UK House Market Sentiment Hits 15-Mo High

00:01 12May09 RICS HOUSE PRICE BALANCE -59.9 IN APR VS -72.1 IN MAR
00:01 12May09 RICS HOUSE PRICE BALANCE WAS FORECAST AT -69.3 IN APR
00:01 12May09 RICS HOUSE PRICE BALANCE AT STRONGEST LEVEL SINCE JAN 2008
00:01 12May09 RICS NEW BUYER INQUIRIES UP AT FASTEST PACE SINCE AUG 1999
00:01 12May09 RICS: UK House Market Sentiment Hits 15-Mo High



LONDON - Sentiment in the depressed housing market of England and Wales recovered in April to its strongest level since January 2008, with sales rising for a second month and new buyer inquiries increasing at the fastest pace for almost 10 years, data showed Tuesday.

Although U.K. residential property prices have dropped by more than 15% and sales have fallen by more than 40% over the last year, the latest report from the Royal Institution of Chartered Surveyors is further evidence that the market has started to recover.

The RICS survey's headline price balance, which is calculated by subtracting the percentage of surveyors reporting falling prices from those reporting rising prices, jumped to -59.9 in April from a revised -72.1 in March - the strongest level since January last year.

The result was far higher than the market consensus estimate of -69.3 from a Dow Jones Newswires survey of economists last week. But although it represents a substantial improvement from a record low of -94.9 in April 2008, it remains deeply negative.

"There are tentative signs that the market is starting to pick up but
transactions remain at very low levels and we are unlikely to see significant improvement while money remains in short supply and the employment picture is uncertain," RICS spokesman Jeremy Leaf said in a statement.

The survey showed that the average number of completed sales per surveyor over the previous three months rose for the second consecutive month to 10.6 in April from 9.7 in March and a record low of 9.6 in February. Nevertheless,
property sales were down 41% on the year, RICS said.

RICS said transaction levels could benefit from an increase in supply but lower prices and changes in the rules governing what documentation homeowners must provide prospective buyers were discouraging sellers.

New buyer inquiries increased for the sixth consecutive month in April and at the fastest pace since August 1999, but new instructions to sell property fell sharply, it said. Buyer inquiries may have benefitted from April's good weather and Easter holidays.

The RICS survey is the latest of several economic reports to show an
improvement in recent months, suggesting the government's multibillion pound fiscal stimulus and record low Bank of England interest rates are helping ease the impact of the recession in some quarters.

Some other house price measures and consumer confidence figures also appear to have turned a corner. The latest report from the British Retail consortium also released Tuesday showed U.K. retail sales posted their strongest annual growth for three years in April.

The RICS poll of 245 surveyors showed the ratio of completed sales to the stock of unsold property on the market - a gauge of market slack and a lead indicator of future price changes - rose for the fourth consecutive month to 15.3% from 14.6% in March.
Newly agreed sales rose at the fastest pace since January 2004, while confidence in the sales outlook increased for the fourth consecutive month and at the strongest pace since 2005. Although confidence in the price outlook remains negative, it has recovered to its highest level since October 2007.

But RICS suggested ongoing tight financing conditions would mean any recovery in the housing market will be gradual.

"House prices could stabilize in the coming months but prospective purchasers - and first-time buyers particularly - will continue to encounter challenges while banks maintain current loan to value ratios and make accessibility
difficult even for those who have accumulated considerable equity in their existing properties," Leaf said.