House prices are tipped to bounce back sooner than expected after the number of new buyers entering the market rose for the third consecutive month.
The number of new enquiries rose between January and March while the number of sellers entering the market rose for four months in a row, industry body the Royal Institution of Chartered Surveyors (RICS) has said.
RICS said more activity suggests house prices could rebound by the end of the year,
More than 8pc of property professionals reported a rise in inquiries, according to RICS, the most positive result since February 2022.
Tarrant Parsons, of RICS, said: “Demand continues to recover gradually across the UK housing market, with new buyer enquiries rising for a third month in succession according to the latest survey feedback.
“With the inflation backdrop turning a little less difficult of late, this has led to expectations that the Bank of England will be able to start lowering interest rates later in the year. This should continue to support the market to a certain degree going forward.
“In keeping with this, near-term sales expectations point to an improving outlook, albeit the scope for an acceleration in activity will still be relatively limited given mortgage rates are set to remain much higher than in 2020-21,” he added.
Sarah Coles, of Hargreaves Lansdown, said: “More upbeat sentiment and expectations of rate cuts are persuading buyers and sellers back to the market in increasing numbers.
“They’re not yet rushing to agree sales or push prices up, but agents are confident that this is on the way once the weather cheers up and mortgage rates fall.”
The RICS research showed fresh property listings increased for the fourth month in a row, with 13pc of those in the property industry noting a pick-up in new instructions to sell last month.
Far fewer surveyors told RICS they had seen prices falling in March, with a net balance of 4pc, compared with September 2023, when it was 67pc of professionals.
The research pointed to a “suggestion that an upward trend may emerge later in the year.”
Demand for new rental leases from tenants continued to rise last month, while fewer landlords instructed surveyors, suggesting a squeeze on supply. A third of surveyors expect rental prices to rise over the next three months.
It comes as many regions across Britain may have hit a ceiling in affordable rents that can be charged to tenants.
The Financial Conduct Authority (FCA) released research this week indicating that half of renters reported not coping financially or finding it difficult to cope in January, with just over six in 10 renters in the FCA’s research had seen rent increases in the previous 12 months.
