Economic News

LONDON (ShareCast) - Conditions in Britain's housing market improved again in July, with fewer estate agents reporting falling prices and the number of new buyer enquiries rising again.

The balance of surveyors reporting rising rather than falling prices improved to -8% last month, according to the Royal Institution of Chartered Surveyors (Rics), the best result since August 2007.

That's far better than the -18.1% reported in June and ahead of the -10% predicted by analysts. New buyer enquiries rose for the ninth month in a row.

"Although demand for property is continuing to rebound, it still remains low from a historical perspective," said RICS spokesman Jeremy Leaf. "Crucially it is the lack of supply that is helping to underpin prices at the present time."

"Significantly, the more positive news on prices - at least in some parts of the country - may prompt more properties to come on to the market."

But the numbers point to a clear North-South divide. More chartered surveyors in London, the South-East and the South West are reporting rising prices than those in the North.

Last week, RICS upped its forecast for house prices this year and suggested there could be a rise over the whole of 2009. It had previously estimated a price fall of 10-15% this year.

Elsewhere today, the Department for Communities and Local Government (DCLG) said house prices climbed 1.6% in June, narrowing the annual decline in prices to 10.7% from 12.7% in May.

Influential think tank the Centre for Economics and Business Research, said Monday that house prices have got another 3% to fall before rising 2% in 2010.

More mortgages are also being agreed, figures from the Council of Mortgage Lenders (CML) revealed Tuesday.

Mortgage lending rose 23% in June to an 11-month high of 45,000, up from 36,500 a month earlier.

"Low interest rates and realistic selling prices have helped generate a welcome increase in transactions," said CML economist Paul Samter. "But there is some way to go before we reach normal levels of activity."

"There are tentative signs that lending criteria are easing, but remortgaging demand is likely to remain subdued whilst interest rates stay at current levels."