"The market consolidated in November, amid suggestions that the current shortage of stock will continue for the near term, leading to a flat market in the coming months"
Its data shows the near term outlook for prices and sales is now broadly flat, with contributors appearing unconvinced that the market will gain impetus in the coming months.
Feedback from respondents suggests that housing market activity continues to be stifled by a persistent shortage of new instructions along with economic uncertainty.
Negative house price balances for London, the South East and East Anglia offset growth elsewhere in November, with house prices across the UK showing no monthly growth.
Three month expectations are now more or less flat at the national level, with sentiment remaining particularly cautious in London and the South East. In contrast to this, contributors are confident that prices will rise in the North West, Wales, Northern Ireland and Scotland during the three months ahead.
Over the twelve month horizon, the price expectations series is positive in virtually all areas. London stands as the sole exception, indeed, sentiment remaining firmly entrenched in negative territory.
Turning to activity, the trend in new buyer enquiries appeared a little more stable over the month having declined quite noticeably in October and September.
At the same time, newly agreed sales continued to slide at the headline level albeit the pace of decline moderated to a certain degree. The net balance came at -10% following a reading of -20% previously. However, with the exception of Wales and Northern Ireland, where sales rose quite firmly, sales were either a flat or negative across most other areas.
Going forward, national sales expectations remain flat for the coming three months although there was a marginal improvement at the twelve month horizon.
Looking at supply, new instructions to sell continued to deteriorate at the headline level. This extends a run of 22 months in which this series has not seen a positive reading.
Nationally, the largest share of respondents (49%) noted appraisals were lower, while only 15% stated they were higher on a like for like basis. As such, RICS says this "does not bode particularly well for the new instructions pipeline in the near future".
Brian Murphy, Head of Lending for Mortgage Advice Bureau, commented: "The data indicates that the market consolidated in November, amid suggestions that the current shortage of stock will continue for the near term, leading to a flat market in the coming months overall. Having said that, it would appear that the regional variations we’ve seen for so much of 2017 are still at play and potentially likely to continue, with London and the South East pricing expected to see continued downwards pressure on pricing, yet other areas such as Scotland, Wales, Northern Ireland and the North West anticipated to see continued growth, albeit at perhaps a more subdued level than we’ve seen previously.
Considering that November was, by many standards, an unusual month due to both an interest rate increase and changes to Stamp Duty and Land Tax for first-time buyers, along with what one might suggest to be a challenging political and economic environment, the fact that the market has remained stable is likely to be welcome news for many in the industry. Pragmatically, many believe that a ‘flat’ market at least represents stability, and going into 2018 that would provide the market with a firm footing. Where values have dipped, for example in the Capital and commutable areas, this may perhaps provide first-time buyers with the ability to benefit from the SDLT exemption and get a foot on the ladder, rather than having to compete with rising prices.”
