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Housing market showing 'further weakness': RICS

Contributors sense "little prospect of a turnaround" in the near term, as concerns over the potential impact of Brexit continue to cause hesitancy.

Rozi Jones
|
14th February 2019
slow down road
"The overall outlook somewhat masks the more nuanced picture that has been evident of late, where a series of micro-climates have developed across the UK."

RICS says short-term indicators are pointing to 'further weakness' in the housing market as activity measures for both buyers and sellers continue to slip and prices continue to soften.

Its latest survey results continue to signal a subdued backdrop, with enquiries, sales and new instructions all falling further over the month.

Contributors sense "little prospect of a turnaround" in the near term, as concerns over the potential impact of Brexit continue to cause hesitancy, alongside affordability constraints in parts of the country.

Its data shows that demand softened across virtually all parts of the UK, while the flow of properties being listed on the sales market also deteriorated.

Rounding off a subdued month for market activity, agreed sales also fell further, with the pace of decline gathering momentum compared to the December results.

Looking ahead, sales expectations for the coming three months remain downbeat, both at the national level and across most parts of the UK.

However expectations at the twelve month horizon are modestly positive.

Prices continue to rise firmly in Northern Ireland and Scotland, with both countries displaying the strongest price expectations for the coming twelve months, followed by the North West of England and Wales. By way of contrast, contributors in London still see house prices falling at the twelve month horizon.

Brian Murphy, head of lending at Mortgage Advice Bureau, commented: "The short to medium term expectations for some regions are muted, however other areas of the UK, such as Wales, the North West, Scotland and Northern Ireland are far more positive.

"The overall outlook somewhat masks the more nuanced picture that has been evident of late, where a series of micro-climates have developed across the UK. Yorkshire and the Humber and both the East and West Midlands have seen continued buyer demand in the last few months, for example, and there are of course buyers across the country who still both want and need to move home, due to their individual circumstances, regardless of the ongoing political uncertainty.

"The current lending climate, which continues to benefit borrowers due to the highly competitive rates released by lenders in a bid to retain existing customers and gain new business, is providing support to the market overall as rates remain at or near to historic lows. The shortages of available homes for sale in many areas is also a key factor in values remaining steady.

"So, whilst some homemovers are, understandably, ‘waiting to see’ what the final Brexit denouement will bring, it’s quite possible that once we have clarity one way or the other, people will then plan and get on with their lives accordingly.”

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