"Lack of stock on the market remains a key challenge for the sector with recent and forthcoming tax changes having a material impact on transaction levels"
Anecdotal evidence cites a lack of choice; uncertainty due to the calling of an early election; and the ramifications of stamp duty changes as factors hampering activity.
New instructions remained negative for a fourteenth month in a row at the national level, leaving average properties on estate agents books hovering close to record lows.
15% more respondents saw new instructions drop in April, and perhaps consequently, new buyer enquiries were unchanged nationally having failed to see any meaningful growth since November 2016.
Alongside stagnant buyer demand, respondents reported agreed sales were beginning to slip slightly following a number of months of flat transactions. Overall 9% more respondents saw a drop in sales over the month (from -3%), which is the weakest reading since the aftermath of the referendum.
Looking ahead, the flat picture for sales is expected to continue over the next three months and expectations have moderated in virtually all areas of the UK when compared to the March survey. However, the twelve month outlook is more optimistic with 31% more respondents anticipating a pick-up in sales over the year ahead at the national level.
Despite the subdued backdrop, 22% more respondents saw prices rising in April, (unchanged from March) – underpinned by the lack of stock. As such, house prices continue to rise nationally, with the pace of growth steady over the last five months, although there is variation across the UK. In Central London the indicator on prices has been in negative territory for 13 months. In addition, price growth has eased noticeably in in East Anglia recently and, along with the North East was not seen to have seen any increase in April. At the other end of the scale, in the North West 67% more respondents noted higher prices in April with the reading having been above 50% in this part of the country in each of the last seven months.
Looking ahead at the national picture for near term price expectations, these have eased slightly with the net balance moderating to +4% (from +11%) suggesting that house price inflation is anticipated to slow in the three months ahead. Notwithstanding this, the twelve month expectations predict that all parts of the UK will see growth in house prices.
Simon Rubinsohn, RICS Chief Economist, commented: “Although the picture clearly does vary across the country, the bulk of the feedback we are receiving points to a fairly flat summer for both activity and prices. Lack of stock on the market remains a key challenge for the sector with recent and forthcoming tax changes having a material impact on transaction levels, particularly at higher price points. Uncertainty relating to the forthcoming general election is also highlighted by some respondents as a reason for inertia."
