LONDON (ShareCast) - The balance for UK house prices rose to -7 from -14 in October, according to the latest survey data from the Royal Institute of Chartered Surveyors (RICS), the highest reading for more than two years.
The above came mainly as a result of a large rise in the pace of enquiries from new buyers to 18 from 5, the fastest pace of gains since December 2009.
"The number of potential buyers going out and viewing property saw a welcome boost last month," RICS spokesman Ian Perry said. Nevertheless, he added that, "Overall activity is still very low in most parts of the country" and "access to affordable mortgage finance is still very difficult for many first-time buyers."
The report - which some are interpreting as tentative evidence of a stabilisation in the housing market - comes ahead of this morning´s inflation data, which are expected to show a moderate increase in consumer prices, and tomorrow´s Inflation Report from the Bank of England, when it will release new forecasts for growth and inflation.
A gauge of three-month price expectations rose to -3 from -9, its highest in nine months.
The index for newly agreed sales rose to 20, the highest since December 2009, from 0. Similarly, while the outlook for sales deteriorated slightly (the balance for sales three months ahead fell to 25 from 27), it nevertheless remained well above the long-term average of the series.
"With the ratio of sales to stocks picking up for the fourth month running (albeit at a modest pace), it seems that spare capacity in the market is starting to fall, which could explain the improvement in price prospects," Barclays Research says.
By geographies, London continued to outperform the rest of the country, although the South East of the UK also reported rising house prices for the first time in over two years.
Commenting on the data economists at Barclays Research have added that: "We expect house prices to remain flat until the end of this year and to see a gradual recovery next year. This improvement is likely to come about mainly from the improvement in household earnings in our view, while the Bank of England's Funding for Lending Scheme (FLS) could also provide some support to prices (albeit modest)."
For its part, RICS states that:"whilst it's still far too early to call an end to the housing market stalemate - headwinds abound - there are some early indications alongside the RICS survey which suggest, at least in the near term, the risks to activity and prices are very slowly shifting northwards."