House sellers test market

SELLERS flooded onto the market in May following the recent abolition of home information packs (Hips) by the coalition government, the latest monthly survey from the Royal Institution for Charted Surveyors (RICS) will show today.

However, the sharp increase in new instructions to +21 per cent from +11 per cent was not enough to prevent house prices from rising further last month.

Almost three-quarters of estate agents said that they expected the decision on Hips to lead to a higher level of new vendor instructions.

The increase in supply is anticipated to be around 15 per cent and RICS said it expects this trend to continue in the coming months.

The net price balance increased to +22 per cent, its best level since January. Buyer interest continued to pick up and agents became more optimistic about the sales outlook. However, the net balance of estate agents expecting rising rather than falling prices fell back to +5 per cent from +7 per cent in April.

RICS spokesperson Ian Perry said: “Surveyors are generally confident that sales will continue to pick up over the summer months.”

Perry continued: “The increase in supply as a result of the abolition of Hips is helping to support this optimism despite continuing concerns about mortgage finance.”

But he added: “A higher level of instructions should meanwhile also lead to a flatter trend in house prices in the latter part of the year.”

The recovery in house prices continues to be led by London and the South-East. This was followed by the North and North-West, which also saw strong rebounds in May.