"Demand to buy has been falling off a cliff, not least because physical viewings and surveys cannot be arranged despite the growth in virtual tours."
Having started the year with a marked pick-up in momentum, government measures introduced to combat the spread of the coronavirus have required estate agents to close their offices, meaning "much activity has effectively been frozen over the coming months", RICS says.
In terms of new buyer demand, a run of three successive monthly increases was brought to an abrupt end, with a net balance of -74% of respondents across the UK reporting a fall in enquiries during March.
Likewise, the uptick in sales volumes that had been seen since December 2019 went into reverse, evidenced by a headline net balance of -69% of survey participants noting a decline over the month. Unsurprisingly, sales fell across all parts of the UK when compared with February.
Looking ahead, near term sales expectations saw a net balance of -92% representing the weakest figure since the inception of this series back in 1998. At the twelve month horizon, sales expectations are a little less downbeat, albeit a still sizeable net balance of -42% of contributors expect sales to be down over the year ahead.
New instructions being listed on the market for sale also dropped back sharply, with a net balance of -72% of contributors reporting a fall over the survey period. In keeping with this, inventory levels slipped noticeably during March, hitting a fresh record low of 40 properties, on average, per branch.
The survey’s headline indicator on prices (which captures changes over the past three months) remained slightly positive in the latest results. A net balance of +11% of contributors saw prices increase in the three months to March, although this reading has eased from +29% in February. When disaggregated, Northern Ireland, Scotland and the South West of England have recorded the strongest growth over the last three months.
However, near term price expectations sunk from a net balance of +21% in February, to -82% in March. With regards to the twelve month view, price expectations are somewhat less negative, as a net balance of -38% of respondents envisage house prices falling over the year to come (this is down from a positive net balance of +71% in February).
Sentiment on the medium term outlook for prices has proved a lot more resilient. Respondents currently expect price growth to average just over 2.5%, per annum, over the next five years. This remains closely aligned with the average five-year house price inflation projections seen over the past twelve months.
Jeremy Leaf, former RICS residential chairman, commented: "The RICS survey has proved yet again to be a reliable indicator of housing market trends – and unfortunately so, on this occasion. It confirms what we are seeing on the ground - demand to buy has been falling off a cliff, not least because physical viewings and surveys cannot be arranged despite the growth in virtual tours.
"Nevertheless, interest in property remains strong, evidenced by active portal browsing and enquiries whereas nearly all of our sales which were at an advanced stage prior to lockdown proceeded to completion with several more in the pipeline.
"Interest in lettings has been particularly healthy too leading us to believe the bounceback will be sustainable provided restrictions are eased fairly soon and damage to the economy is relatively limited."
