London’s depressed housing market is showing glimmers of recovery as the number of new homes on the market edged up in May, according to government figures published on Thursday.
For the third consecutive month, the number of real estate agents and surveyors reporting an increase in new listings rose in the U.K. capital, according to a monthly survey by the Royal Institute of Chartered Surveyors. But officials were hesitant to predict an imminent turnaround in London, or the country’s, subdued market.
A housing shortage braces London and many parts of the U.K. as widespread price declines have made potential sellers reluctant to put their homes up for sale in a down market.
Nationwide, May marked the first month in more than two years that more agents reported an increase in new listings, according to the official survey. Still, more months of positive supply growth will be needed before experts are convinced the shortage is headed for recovery, said Simon Rubinsohn, RICS chief economist, in a statement.
“Although agents are suggesting that a little more supply may have come onto the market in May, some of it from the Buy to Let sector, inventory levels still remain near historic lows,” Mr. Rubinsohn said. “It is premature to conclude that a sustained upturn in available stock is imminent.”
Outside of upticks in supply, the survey showed continued price falls in London and flat activity nationwide. Real estate agents reported the worst price outlook in the capital, followed by South East England, which was experiencing a spillover from poor sentiment in London.
“Against this backdrop, it is likely that the headline picture regarding activity in the housing market will remain subdued for some months to come,” Mr. Rubinsohn said.
Meanwhile, a few regions in the U.K. diverged from the overall morose.
Agents reported sales increased significantly in Northern Ireland, Scotland, as well as the West and East Midlands.
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