"With more stock coming to the market as confidence increases, we are seeing further buyer demand, taking advantage of consistent interest rates and lower inflation."
- Tomer Aboody, director of MT Finance
The housing market is continuing to see steady improvement in sales conditions, with buyer demand edging higher and near-term expectations pointing to activity gaining further traction over the coming months, the latest RICS survey results show.
Alongside this, house prices have stabilised at the headline level, with forward-looking metrics suggesting that an upward trend may emerge later in the year.
Looking at buyer demand, an aggregate net balance of +8% of respondents reported an increase in new buyer enquiries during March. This is up from a reading of +4% in the previous iteration of the survey, and marks the third consecutive month in which this measure has been above zero. The current figure represents the most positive return for the demand series since February 2022.
At the same time, the newly agreed sales metric has, as yet, not seen quite the same turnaround. The latest net balance of -5% is consistent with a broadly stable trend in agreed sales having seen little change from the reading of -4% last month. Nevertheless, a net balance of +13% of survey participants now foresee sales volumes rising over the coming three months. This compares with a figure of +6% posted in last month’s results. Moreover, on a twelve-month view, a net balance of +46% of contributors envisage sales activity rising (up from an already solid reading of +42% beforehand).
On the supply front, the flow of new listings coming onto the market increased for a fourth successive report, evidenced by a net balance of +13% of respondents citing a pick-up
in new instructions over the month. Similarly, contributors continued to note that the number of appraisals undertaken of late is above that of the previous year (net balance +21%). Having languished in negative territory throughout every monthly report released in 2023, this indicator has now signalled an improvement in market appraisal levels for three straight months.
Alongside this, a net balance of -4% was returned in March for the survey’s indicator tracking house price trends, suggesting a largely stable picture is in place, with the previous negative readings diminishing to some degree in each of the last six reports (recovering from a recent low of -67% back in September of last year). When disaggregated, all regions/countries have seen their readings for the house price series either turn less negative or move into positive territory when compared to the start of the year. In the case of Scotland and Northern Ireland, the house price net balance moved further into expansionary territory at +21% and +60% respectively (from +10% and +53% in February).
Looking ahead, respondents continue to foresee house prices returning to growth over the next twelve months, as implied by the net balance of +38% posted in March (marginally higher than the figure of +36% reported previously). All parts of the UK are anticipated to see a rise in house prices over the year to come, with sentiment particularly robust in Northern Ireland, London and Scotland.
Jeremy Leaf, north London estate agent and former RICS residential chairman, commented: “Buyers and sellers are emerging from an extended hibernation, which resulted in a subdued market for much of last year. Better weather is coinciding with much more interest than we have seen for several months.
"However, the increased choice of properties is making it more difficult for buyers to make up their minds as they worry about missing out on an alternative. As a result, decision-making is more protracted and bargaining is harder so sales are taking longer. Prices are firming up but concerns about affordability are keeping a lid on sellers who think that more viewings will lead to much higher values."
Tomer Aboody, director of MT Finance, added: “With more stock coming to the market as confidence increases, we are seeing further buyer demand, taking advantage of consistent interest rates and lower inflation.
"With expectations of a reduction in interest rate growing all the time and more stock expected to be launched this spring, this positive sentiment is likely to continue, even as a general election looms on the horizon."
