UNITED Kingdom estate agents are more upbeat about sales than at any time since before the pandemic amid easing mortgage costs and hopes that the Bank of England will cut interest rates, a survey found.

The Royal Institution of Chartered Surveyors (RICS) said its gauge of 12-month sales expectations jumped 10 percentage points in December to 34, the highest level since February 2020.

The improved outlook came as buyer demand shifted from negative to “neutral territory” for the first time since April 2022, while the downward pressure on house prices showed signs of diminishing, RICS said.

The findings add to evidence that the housing market is turning a corner after skirting predictions of a crash last year. Cheaper mortgages fuelled by a price war among lenders is bringing buyers off the sidelines. The recovery is already under way, RICS said, with newly agreed sales in December the least negative for two years.

“Supported by an easing in mortgage interest rates of late, buyer demand has now stabilised, and this is expected to translate into a slight recovery in residential sales volumes over the coming months,” said Tarrant Parsons, senior economist at RICS.

The prospect of a “solid recovery” in sales will be widely welcomed in a sector that relies on a healthy flow of transactions. Insolvency figures this week showed real estate was one of the hardest-hit parts of the economy last year, with almost 700 companies going out of business between January and November – almost double the level pre-pandemic.

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The RICS survey follows a report from property portal Rightmove, which showed asking prices for UK homes jumped the most in eight months in January after a post-Christmas surge in demand. However, RICS warned against declaring victory just yet.

“The lending climate is set to remain restrictive compared to much of the post global financial crisis era next year, meaning any uplift in activity is likely to be limited for the time being,” Parsons said.

According to Moneyfacts, the average two-year fixed mortgage rate has fallen to 5.62 per cent, down from almost 7 per cent last summer but well above levels in 2022.

The average number of properties listed for sale with estate agents remained unchanged, RICS said. Stock levels remain below the historical average, though, a factor that may support prices again this year. BLOOMBERG