The UK house price balance rose to zero in December, versus a reading of -9 for the previous month, according to the latest data released on Tuesday morning by the Royal Institute of Chartered Surveyors (RICS).

The consensus estimate had been for a reading of -8.

Interest from both buyers and sellers was at good levels, with the new-buyer enquiries balance edging up to 12 (from 10), while the new-seller instructions balance was flat at 2.

The sales-to-stock ratio, an indicator of housing market slack, rose to 24.7% from 23.1%.

"The data on activity were a bit mixed, but overall they were consistent with a stabilisation in the housing market," commented economists at Barclays Research.

There was a notable improvement in the forward-looking measures, as the apparent increase in buyer interest and prices led vendors to increase their expectations for the coming three months in terms of sales and prices, these economists went on to explain.

The balance for price expectations rose to 1 (from -5), its first positive reading since May 2010.

Meanwhile, the sales expectations balance improved significantly, to 24 (from 13), consistent with an increase in sales similar to the pace seen at the end of summer.

"These are encouraging signs and support our view that house prices and transactions are likely to stabilise in the near term, with a gradual recovery emerging towards the end of the year. House prices have declined about 10% in real terms since the start of 2010, and we think this downward trend is likely to come to an end in 2013.

"We see a number of factors supporting the housing market this year, as monetary policy remains at a historically loose level and housing supply remains restricted. Furthermore, we expect the BoE's Funding for Lending scheme to also provide some support, albeit modest, through improved mortgage availability and lower mortgage rates," Barclays added.

AB

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