"It’s also reassuring to see that new buyer enquiries moved from -94% in April, to -5% in May which showcases a more stable demand – this is good news for the UK property market."
In terms of new buyer enquiries, the headline net balance moved from a record low of -94% in April to a reading of -5% in May. As such, this indicator is consistent with a much more stable demand picture over the month.
Alongside this, although the newly agreed sales indicator remained in negative territory (net balance -35%), the latest reading was significantly less downbeat than that returned last month (-93%). Similarly, despite a net balance of -20% of contributors reporting that new instructions coming onto the market continued to fall in May, this is noticeably less negative compared to the reading of -97% last time out. Current activity metrics did not see any meaningful changes in Scotland, Northern Ireland and Wales, where restrictions on estate agents were not removed in May.
Looking ahead, near term sales expectations turned broadly neutral in May, with the net balance coming in at -4% (up from -58% previously). Further out, twelve month sales expectations are now slightly positive, as a net balance of +10% of contributors now envisage sales picking up, up from -6% in the April results.
With regards to house prices, the survey’s headline price indicator (capturing changes over the past three months) moved deeper into negative territory. The national net balance slipped to -32% compared to a reading of -22% in April, representing the weakest monthly figure going back to 2010. Going forward, near term price expectations remain downbeat, albeit to slightly lesser degree than beforehand, with the net balance standing at -43%. Furthermore, twelve-month price expectations also remain negative, evidenced by a net balance of -16% of survey participants anticipating prices will fall over the year ahead.
Ross Counsell, chartered surveyor and director at Good Move, commented: “Today’s RICS Residential Market Survey results point to a slight improvement in the outlook for sales over the coming 12 months. It’s also reassuring to see that new buyer enquiries moved from -94% in April, to -5% in May which showcases a more stable demand – this is good news for the UK property market.
“However, we must not forget the impact that the current pandemic has had on both buyers and sellers. Today, people are a lot more cautious with their finances due to a decrease in home income caused by loss of work and other factors. Buyers would have once paid the asking price for their desired property, but now they’re going to be more inclined to submit a much lower offer. This is something sellers must be aware of, because buyers will start to ask if they’ll accept a lower offer on their property and may be inclined to look elsewhere if they say no."
