Spring Property Survey: At an estate agent near you . . . the Great Recovery: Well, perhaps . . . David Lawson looks for facts behind the figures

IS THE Great Housing Recovery under way? Are green shoots breaking through the long-

frozen ground? It certainly seems that way as the Halifax and Nationwide building societies say prices increased in March. Meanwhile mortgage lending soars, builders whoop about booming sales, and agents clear windows of yellowing property details. But . . .

That little word hangs lamely at the end of almost every ecstatic outburst over the great revival. Forget green shoots for a moment; think of false dawns. These came and went with such regularity that no one will put their hand in the air and promise salvation. They are worried you might catch sight of fingers burnt by previous predictions.

Even the Halifax, which reports today that prices rose 1.2 per cent in March - the first time since a blip last November - is acting coy. It wants to see a few more months of good figures before betting that we are on the way to a sustained upturn.

Meanwhile a great mass of contradictions buzz around our heads. Would you believe, for instance, that agents now complain that shortage of property is holding up recovery? If they have no homes, they can't sell them. But whatever happened to that overhang of unsold property we were told would prevent prices from bouncing back quickly? Nothing is as simple as it seems. There is both too much property and too little; more homes are selling but prices appear to be falling; buyers are better off than for decades yet more depressed. How can you discern any clear picture emerge from that little lot?

One way is to weigh up the good with the bad. On the positive side, sales are rising. Contract exchanges boomed 30 per cent in central London during January and February according to CLEA, which collates information from leading agents like Knight Frank & Rutley, John D Wood, Hamptons and Chestertons in The London Magazine. Simon Agace spreads this rosy view over the whole metropolis, saying his Winkworth chain is handling 90 per cent more sales than in November. The picture is repeated across the country via 4,000 offices feeding into the Corporate Estate Agents Property Index, which also reports rising sales.

But hold on a minute. Fewer homes were sold in the autumn than any time in living memory, so the figures could only go up. And at least one respected forecaster, James R Adams & Associates, thinks we will still end up with 6 per cent fewer sales by the end of 1993 than last year.

The Budget did little to help. Doubling the threshold for paying stamp duty to pounds 60,000 appears to provide a bonus for first-time buyers, but it is not lack of money holding back doubters. Houses are cheaper in real terms than for 20 years. Even in the last couple of years costs have halved through a combination of falling interest rates and prices.

Some are taking advantage of this fortunate swing of the pendulum, as the sales 'boom' shows. Many, however, have other problems holding them back, and this is where we stray into a few negatives.

Fear of unemployment is the big burden. No matter how cheap the mortgage, can you be sure of wages to pay it? That fear is not helped by the promise that mortgage tax relief will fall next year and homes will cost more to run because of VAT on fuel bills. Around 2 million owners are also locked into homes that are worth less than the mortgage, so they cannot move.

Another crucial factor is that prices appeared to be still falling until recently. The Nationwide and Halifax rarely agree on exact figures but just as they came together on rising March prices, both also recorded drops of just under half of 1 per cent in February. That makes buyers nervous about taking on something that will be cheaper tomorrow.

This exposes a deep flaw in the way we look at housing. These surveys look backwards at loans agreed months ago. Ask an agent today and you find that prices have definitely stabilised - at least that is the message from 75 per cent of members polled by the Royal Institution of Chartered Surveyors.

In any case, such a tiny fall would be more than made up long before any buyer considers moving again. It may even fade to insignificance this year. The Halifax is convinced that the latest surge of buying will turn values upwards by the end of 1993 - although after previous blunders in forecasting it is not putting forward a figure.

Owners expect prices to harden and are holding back for a better deal later in the year. Add a whole generation trapped by negative equity who cannot release homes and you get the weird situation of property shortages in places as unlikely as London's Docklands, where homes are now being sold off- plan, according to Yolande Barnes, head of Savills Research.

Repossessions are also muddying the crystal ball. Around 60,000 more will be sold this year, helping hold down prices. But many buyers are not interested in semi-derelict hulks and cannot find good homes.

'The market is like an old Soviet department store,' says Ms Barnes. 'There seems to be plenty of stock but it is stock few buyers want. When desirable goods do appear, there are queues around the block.'

Patricia Farley, a central London agent not noted for looking on the dark side, put this whole confusing situation into perspective. 'The market should be booming but there are no real signs it is - or is likely to. Things are better than last year but that is not saying much.'

Matters will improve as buyers grow in confidence - providing interest rates and other unpredictables do not spring any nasty surprises. Prices will harden as the year matures; a few may even creep up in hot- spots where sellers keep holding back property - but don't bet on it applying to your home.

Generous discounts from builders and cut-price mortgages will gradually disappear, which suggests that the time for grabbing bargains may be fast disappearing. But the less desirable places bought or built in the boom will still be stuck on the market next Christmas.

Does all this indicate the green shoots of recovery? Another eternal optimist, Brian Whitfield of the Household Mortgage Corporation, gives the most realistic conclusion. 'On the whole, taking all things into consideration, I'll stick my neck out and say . . . maybe.'

(Photograph omitted)