According to the Royal Institute of Chartered Surveyors’ (RICS) latest UK housing market survey, sentiment in the housing market continues to improve as 8% more chartered surveyors expect prices to rise than fall over the next three months which is the highest reading for this series since April 2007.

The improved optimism for prices can at least partly be attributed to the fact that increased interest from new buyers has not been matched by supply coming onto the market. New-buyer enquiries remained high in July with a net balance of 63% reporting a rise rather than a fall which is marginally lower than the previous month but still indicative of a growing level of interest in the market.

At the same time the levels of stock on estate agents books remains very low. In July, more chartered surveyors reported an increase than a decrease in the number of new instructions for the first time since May 2007. However, the positive net balance of just 2% suggests that vendors are still a little reluctant to put properties on the market.

Housing market activity, in terms of actual transactions, also continued to rise during July. The monthly increase in the agreed sales net balance pushed that measure to its best level in a decade. That is consistent with the further improvements in the average sales per surveyor series. On average, surveyors sold 15 properties over the past three months compared with the previous reading of 13. As a result the sales-to-stock ratio (a measure of market tightness) increased slightly to 25, supporting the argument that the imbalance in stock levels is still providing support for prices.

The regional picture highlights the north/south divide developing in the English market. The sales-to-stock ratio is highest in London and the South East and lowest in the North.