Sales remain flat as available property hits record low: RICS

The UK housing market "continues to lack impetus", with new buyer enquiries flat for a third successive month in March, according to the latest RICS Residential Market Survey.

Related topics:  Finance News
Rozi Jones
13th April 2017
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"For the time being it is hard to see any major impetus for change in the market, something also being reflected in the flat trend in transaction levels."

The data shows that the number of properties coming on to the market also dropped further with stock levels hitting a new record low. Consequently, respondents to the survey have reduced predictions for sales growth in the year ahead.

Although the picture remains mixed across the UK, the areas with declining buyer interest outweigh those with increasing demand. The strongest growth in new buyer enquiries was seen in Northern Ireland and the South West and, on a bright note for London, buyer interest has been increasing modestly over the last four months.

New instructions to sell fell noticeably with 13% more respondents seeing a fall in fresh listing rather than a rise over the month. Stock has consequently dipped to a new record low with estate agent branches now holding only 43 unsold properties on average.

Consequently, there has been an impact on sales activity with transaction volumes failing to rise across the UK in each of the last four surveys. In March, 3% more respondents saw a fall in agreed sales rather than a rise; that said, sales did rise relatively firmly in Wales, Scotland and Northern Ireland. Going forward, the national near-term sales outlook also appears somewhat subdued.

The lack of supply in the market continues to underpin prices, with 22% more respondents seeing a rise over the last month across the UK, however, the difference between central London and the rest of the UK continues to widen. If figures from the capital are excluded from the headline figure, price growth in the UK has accelerated since December and price rises in the North West are particularly strong.

Prices in central London have progressively deteriorated and at -49%, the net balance was the weakest since 2009. Nevertheless, 14% more respondents from London anticipate prices will be higher in twelve month’s time.

Further ahead, sales expectations over the next 12 months were reduced with 24% more respondents predicting a rise — down from +37% in February. Moreover, expectations for year ahead sales growth were reduced in eight of the twelve UK regions/countries covered.

Simon Rubinsohn, RICS Chief Economist, commented: "The latest results for our survey show little change in the underlying picture surrounding both sales and markets. High-end sale properties in central London remain under pressure, while the wider residential market continues to be underpinned by a lack of stock.

"For the time being it is hard to see any major impetus for change in the market, something also being reflected in the flat trend in transaction levels."

Richard Sexton, director at e.surv, added: “It’s frustrating to see that the market dipped slightly last month. Transactions have remained flat for a while now, in part due to a lack of affordable housing for first time buyers, which has led many people to continue renting or move back in with their parents in order to save for a deposit. The issue of affordability continues to plague the sector, and the wider economic uncertainty we have experienced recently has only added to this, causing more buyers to adopt a more cautious approach and hold off making big decisions until certainty returns."

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