"Encouraging" October for housing market

The housing market enjoyed an "encouraging" October thanks to an increase in sales and improvements in both supply and demand.

In its latest members' survey, the Royal Institution of Chartered Surveyors (RICS) found that a balance of eight per cent had seen a rise in newly agreed sales. This represented a rebound from September, when a net three per cent had reported a decline in transactions.

October's balance is the best reading for new sales since April 2010, although it remains low by historical standards. Surveyors attributed the rise in activity to a "growing realism" among sellers, who appear more willing to accept offers in order to secure a sale.

The average number of completed deals per surveyor also showed an improvement, rising to 15 in the three months to October. This is the highest figure since April this year.

However, respondents said that where buyers are able to access finance, banks are taking longer to agree terms, which is slowing down the purchasing process.

On the demand side, new enquiries from prospective home owners continued to rise, with a balance of seven per cent of surveyors reporting an increase, up from four per cent in September.

There were also positive signs for supply, with a net three per cent of those surveyed saying new instructions to sell had picked up during October. The previous month, a balance of four per cent had reported a fall.

Ian Perry, RICS housing spokesman, said: "It is encouraging that activity levels appear to have edged upwards over the past month. Indeed, chartered surveyors are generally upbeat about the near-term prospects for transactions.

"However, with the chaotic events in the euro area threatening to spill over to the UK and banks still imposing tough conditions on loans to first-time buyers, any recovery in sales is still likely to be relatively modest. This will inevitably leave many people who would like to own a home unable to access the market."

The average UK house price rose by 1.2 per cent between September and October to stand at £163,311, according to the latest figures from mortgage lender Halifax.