LONDON: UK property surveyors are the most optimistic they’ve been in 13 months about new buyer demand after falling mortgage rates and a rosier economic picture helped stabilise house prices.

The Royal Institution of Chartered Surveyors’ (RICS) measures of buyer inquiries and new listings continued to increase in March as prospective homeowners bet that the Bank of England will lower borrowing costs.

While the indicator for sales remained in negative territory, surveyors, who appraise properties coming to market, turned more upbeat about the near-term outlook.

RICS said its gauge tracking sales volumes expectations over the next three months improved to 13 from six.

“The market has cheered up in March due to a reduction in mortgage rates and the onset of Spring,” said Julian Bunkall, a surveyor at Jackson Stops in Shaftesbury.

“Generally an optimistic feel but the onset of the general election may cause more nervousness.”

The report suggests house prices have stabilised and are set for a bounce back after last year’s slight decline.

RICS’ indicator of house prices grew less negative for the seventh month in a row, rising from minus 67 in September to minus four in March.

Surveyors expect the market will return to growth over the next 12 months in every UK region, particularly in Northern Ireland, London and Scotland.

The findings are in line with Bank of England data showing mortgage approvals jumping to a 17-month high.

Mortgage rates have eased from the 15-year highs seen last summer, and household incomes are rising in real terms again.

 - Bloomberg