Northern Ireland's housing market is on the turn - according to one interpretation of the latest survey by the Royal Institution of Chartered Surveyors (RICS).

The RICS said that, despite the slow market, surveyors remain cautiously optimistic about future prospects, with the sales expectations net balance edging up from +8 to +10.

They said that price expectations remained negative - but less so than last month - with just over a quarter of surveyors predicting falls than rises.

However, this is said to be the strongest reading for this series since June last year.

An RICS spokesperson explained: "The key indicators of market activity remained in negative territory in January, albeit a little less so than in December.

"Uncertainty over the prospects for employment, alongside the shortage of mortgage finance particularly for first-time buyers continues to weigh heavily on transactions levels.

"However, there is a very clear regional pattern emerging with London seeing a greater level of price resilience while in much of the North and Midlands, the market remains under greater pressure," he said.

New instructions, which indicate supply levels to the market, were also moderately negative, with 3% more surveyors reporting instructions fell rather than rose - although this is an improvement from -14% in December.

Alongside this, newly agreed sales continued to drop at a broadly similar pace to the past few months.

Weakness in market activity was also reflected in actual sales transactions, as average sales per surveyor (in the three months to January), slipped back to 14.6. This compares with a reading of 15.2 in December and is the lowest figure since June 2009.

Meanwhile, 31% more surveyors reported house prices fell rather than rose in January.

Although negative, this net price balance has now improved for three months in succession and stands at its best level since July last year.

Significantly, the majority of respondents reported prices were unchanged between December and January reflecting the continuing shortage of good quality stock on the market.

Across the UK, all regions continued to record negative net price balances during January, with the East Midlands (-59) and Yorkshire and Humberside (-46) registering the weakest numbers. By way of contrast, in London the price balance improved to just -4. More significantly, price expectations in the Capital actually turned positive (albeit to only +1) for the first time since the middle of 2010.

Despite the slow market, surveyors remain cautiously optimistic about future prospects, with the sales expectations net balance edging up from +8 to +10.

Meanwhile, the RICS and Ulster Bank report also shows that inquiries and offers on houses have picked up since the New Year.

"The RICS survey suggests there is some positivity and a lot more interest and inquiry from buyers," said the RICS Housing Spokesman Tom McClelland.

"The Greater Belfast area and Lisburn are seeing activity and sales.

"Outside of that, there is uncertainty at just how much more price adjustment has to be made," he said and noted that the severe weather made December a particularly challenging month.

"Clearly January was a better month for the housing market, and there is the expectation that things will improve - albeit from low levels in terms of transaction activity - as we move into the spring, which is generally a busier time of year," he said.

Derek Wilson, Head of Lending Products at Ulster Bank, said: "Our own experience regarding mortgage enquiries in the past month tallies with the expectation that activity in the housing market will increase.

"In particular, we have experienced a marked increase in queries and completions from home movers."

(BMcC/GK)