'Sluggish' housing market in Wales as demand falls

Vendors are still being flexible on price

The Welsh housing market remained "sluggish" throughout January, according to the latest figures by the Royal Institution of Chartered Surveyors (Rics).

New buyer inquiries fell in the month, but new instructions from sellers made a "sharp improvement" from December.

Rics said house buyers fear mortgage rate rises later in the year.

The survey shows Wales as having one of the lowest figures for actual house sales in the UK.

It said would-be purchasers remain cautious about the immediate economic future.

Rics Wales housing spokesperson Tony Filice, said: "Uncertainty over the prospects for employment, alongside the shortage of mortgage finance, continues to weigh heavily on the market in Wales."

Mr Filice, who is also director of Kelvin Francis chartered surveyors, added: "However, there has been an upturn in valuations and instructions, compared with the past three months, and in line with what would normally be expected in January.

"Vendors are still being flexible on price which means sales are still being achieved, at reasonable price levels."

The latest Rics UK Housing Market survey shows that 18% more surveyors reported demand for property falling in January rather than rising.

But it said that new instructions indicating supply levels to the market rose, with 54% more surveyors seeing a rise than in December.

Meanwhile, newly agreed sales edged higher, with 2% more surveyors reporting a rise rather than fall in sales.

However, actual sales remained the same as in December with an average of just 13 sales per surveyor, in the three months to January.

Last month 18% more surveyors reported house prices falling, a figure Rics said was continuing a three-month trend in improvement.

'Over ambitious'

John Nicholas of J J Morris estate agents in Haverfordwest, Pembrokeshire, said: "The ongoing speculation of public sector spending cuts is having an adverse effect on the property market in this area as they are by far the largest employers.

"The general lack of confidence means that many vendors need to be proactive when receiving advice on asking prices.

"There is a demand for realistically priced properties and deals are being done but over ambitious pricing and expectations is still apparent."

Kelvin Francis of Kelvin Francis & Co in Cardiff, said there had been an upturn in valuations and instructions, compared with the past three months, and in line with what would normally be expected in January.

He added: "The attitude is generally upbeat and vendors are still being flexible on price. Therefore sales are being achieved, at reasonable price levels."

But only on Monday, the largest estate agency in south Wales, Peter Alan, which is owned by Principality, said it was undergoing a "testing time" in a depressed market.

It saw an overall reduction in sales volumes, but said a move into lettings and asset management had "strengthened the franchise and delivered record levels of income".