The residential property market appears to have found a floor, at least for the time being, says Simon Rubinsohn, the RICS chief economist.
His comments follow the recent release of the Nationwide house price data that found property prices have risen slightly in three of the last four months.
According to Rubinsohn the Nationwide data also highlights the collapse in inventory on estate agents books.
He added: “Demand, as measured by mortgage activity, is continuing to edge upwards but Bank of England data released yesterday demonstrated in the clearest possible way that a lack of finance is a key obstacle to a more meaningful increase in transaction levels.
“The other interesting element of the Nationwide figures is the regional breakdown. London and the South East were amongst the firmer areas in the second quarter, a result that is broadly consistent with the regions that have seen the strongest gains in buyer enquiries according to the monthly RICS survey.
“The RICS report also notes an increase in interest in Wales, something also noted in the Nationwide survey.
“Tempting as it is to conclude that the bottom has now been seen in the pricing cycle, there are still considerable headwinds for the housing market to overcome, most notably in the form of further significant job losses during the balance of this year.
“In addition, rising market interest rates are likely to exert some upward pressure on mortgage rates even before any official move is made to begin taking back some of the monetary stimulus. That said, without any rise in new instructions the shortage of property could remain a key determinant of the market's fortunes.”
