"A ‘flat’ market in 2017 would, for many, be a welcome prospect, both in terms of level of transactions and house price growth,"
Transaction volumes remained broadly unchanged for the third month in succession, while new buyer enquiries have now failed to see any meaningful growth since November 2016.
Respondents in most regions reported an increase in prices with the strongest growth in the North West of England and notable improvements in Northern Ireland as well. London and the North East of England remain the exceptions with momentum in the former deteriorating for the fourth consecutive month. In fact, surveyors have now reported a fall rather than a rise in London prices for a full year (with most of this activity concentrated in the inner boroughs).
Having moved into positive territory last September, new buyer enquires seem to have gradually lost steam over the past few months ending February on a flat reading. At a regional level, momentum remains strongest in the South West and weakest in the East Midlands.
Meanwhile, the deterioration in the supply of new listings reported in January was confirmed once again this month with 14% more respondents reporting a decline in instructions relative to the prior period’s 12%. The pace at which new instructions are dwindling appears to be particularly acute in the North West of England and West Midlands.
Sales activity appears to have picked up in London after nearly a year of negative to flat growth. Tight supply conditions across a majority of the regions coupled with stable sales activity has led to a further erosion of available stock for sale, with the average stock per surveyor just shy of a record low. Respondents across most parts of the UK continue to highlight in their comments the supply shortage to be very dominant feature of the market at present.
The outlook for transactions show signs of measured optimism as near term expectations remain broadly unchanged at +16% (from +15% in January). At the twelve month horizon, respondents across nearly all areas are more confident with a net balance of 37% of contributors forecasting activity to rise. Wales and Northern Ireland report the strongest expected improvements, followed by Scotland and the North West of England.
Price expectations over the next three months were unchanged in February, with 13% more respondents expecting a rise rather than a fall. At the national level, the outlook improved noticeably over the year to come with a net balance of 63% of surveyors forecasting growth (compared to January reading of +53%).
Brian Murphy, Head of Lending at Mortgage Advice Bureau, commented: "It would appear that the recent pattern of a paucity of stock in many areas coupled with a reasonable level of buyer demand, whilst apparently cooling in some parts of the UK, is maintaining the picture we’ve seen over the last few months.
"That said, a ‘flat’ market in 2017 would, for many, be a welcome prospect, both in terms of level of transactions and house price growth, particularly if both values and volumes seen in 2016 were replicated this year given the current political and economic climate.”
