London set to escape house price slump

 
Julian Harris
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THE UK’s housing market slump has continued into this year, with demand, supply and prices all dropping in January, it was revealed today.

However, London looks set to buck the trend. Prices in the capital are expected to increase over the next three months, according to the latest Royal Institution of Chartered Surveyors (RICS) survey.

“There is a very clear regional pattern emerging with London seeing a greater level of price resilience,” said RICS’s Ian Perry, “while in much of the north and midlands, the market remains under greater pressure.”

Surveyors expect the number of sales in the capital to grow over the coming months.

Overall, the market’s downward trend is beginning to slow, suggesting it will soon bottom out. The proportion of surveyors reporting a drop in prices fell to 37 per cent in January, from 50 per cent in December and 53 per cent in November.

A majority – 56 per cent – reported no change in house prices.

There remain far more surveyors reporting a fall in prices, 37 per cent, than those reporting a rise, six per cent, creating a headline balance of-31 per cent. However, this was the most positive the balance has been since July last year, RICS said.

And the fall in both demand and supply also looks set to level out, possibly stoking a rise in activity for 2011. The fall in new vendor instructions, which indicate supply, slowed to a balance of-3 per cent, up from -14 in December. Demand is still falling, at -7, yet this is an improvement on December’s balance of -12.