Building boost fails to depress house market

 
Ben Southwood
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The number of houses sold in the UK has reached its highest level in over two-and-a-half years

MEASURES of activity in the housing market were strong in February, despite a surge in the project pipeline at the end of last year.

A survey released by the Royal Institute of Chartered Surveyors (RICS) this morning revealed that February saw 16.8 sales for every surveyor polled, up from 15.9 in January, and higher than at any point since late 2010.

And a wider majority of surveyors – 25 per cent versus 18 per cent just a month before – expected prices to climb in the coming 12 months, according to RICS.

This chimed with data from Connells showing that first-time-buyer activity in the housing market had soared over the year.

Residential valuations by first-time buyers were up to a four-year peak, Connells said, as the Funding for Lending Scheme (FLS) continued to drive down the cost of mortgages.

“More affordable mortgage deals are starting to trickle through faster, explained John Bagshaw at Connells.

“According to Moneyfacts, lenders have introduced more than 300 new mortgage products aimed at first-time buyers since the start of FLS.”

This strong market came even though future supply had sharply improved in the previous quarter, according to data from Glenigan.

Councils approved some 51,000 planning applications in the fourth quarter of last year, Glenigan revealed this morning, 40 per cent up on the third quarter and a full 61 per cent higher than during the same period in 2011.

This jump was driven almost entirely by private building, which made up around 82 per cent of the total units approved, RICS said and were also 61 per cent up on the year.

Though this number remained well below pre-recession highs that climbed above 70,000, it still represents an injection into a severely supply-constrained market.