The number of new homes coming on to the market in the North West fell for the eighth consecutive month in February.
Fourteen per cent more surveyors in the region reporting a decline in supply, according to the latest RICS UK Residential Market Survey.
More worrying is that instructions to sell property continue to drop
However, despite the declining supply to the market, sales expectations over the next three months rose with over a third more surveyors in the North West expecting sales to increase, whilst 20 per cent more surveyors in the region expect prices will rise across the forthcoming months.
While nationally Northern Ireland and Scotland continue to outperform the rest of the UK, there were upward shifts in price growth across the South West and the South East.
London saw its sixth consecutive monthly price decline.
Across the whole of the UK, there was an upward shift in prices, driven in part by a decline in the number of houses coming onto the market in most parts of the UK, as new instructions have now fallen in six out of the last seven months.
Anecdotal evidence from surveyors in the North West suggest that the strong start to the year is now beginning to temper off as concerns ahead of the general election appear to be affecting the market.
Vendors are said to be “sitting on the fence” and not putting their properties on the market.
In the North West lettings market, tenant demand remained static and the medium term view for rents over the next 12 months is for 2.9 per cent increase in rent prices.
Simon Rubinsohn, RICS chief economist, said: “It is encouraging that the negative national trend in buyer enquiries appears to be dissipating, perhaps in part because of growing confidence that the cost of borrowing will stay lower for longer.
“More worrying is that instructions to sell property continue to drop.
“This very modest reversal in the demand picture is already being felt in the key measures of price expectations, highlighting the extent of the challenge policy makers will face in addressing the housing crisis in the aftermath of the coming general election.”