"With the stamp duty and Mortgage Guarantee announcements, we can expect to see even more demand throughout the springtime period."
The survey’s headline gauge of price growth registered a net balance of +52% in February, up slightly from +49% in January. As such, RICS says this measure is "indicative of house price inflation maintaining strong momentum", even if the latest reading is a touch softer than the recent high of +66% seen back in October last year.
At the regional level, respondents across all parts of the UK noted some degree of price growth in the latest results, with Wales, the North of England and Northern Ireland all exhibiting particularly strong readings. Moreover, whereas survey participants reported a slight pull-back in London house prices last month, the latest net balance rose to +20% across the capital.
Alongside this, twelve month price expectations picked up, with the UK-wide net balance climbing to +46% from +30% last month. All UK regions/countries are now expected to see an increase in prices over the year to come, with contributors in Northern Ireland and Wales appearing most confident that prices will be higher in a year’s time.
The survey results also pointed to another slightly softer month for sales market activity, albeit this is following an especially strong second half of 2020. In particular, RICS says current lockdown restrictions appear to be deterring new vendors putting their homes up for sale.
However, forward looking metrics have shown some improvement, with sales expected to rise modestly over the coming three months. What’s more, over three-quarters of the survey sample was gathered prior to the Chancellor confirming that the stamp duty holiday would be extended until the end of June (and then tapered through to October) in the recent Budget.
At the national level, the net balance for new buyer enquiries came in at -9% in February. Although this is the second consecutive negative monthly figure, it is noticeably less downbeat that the reading of -29% posted in January. Meanwhile, new instructions also fell for a second month in succession, evidenced by a net balance of -29% of contributors reporting a decline, compared to a reading of -40% recorded in the January figures.
In terms of newly agreed sales, the headline net balance of +1% returned this month is consistent with a broadly flat trend over the latest survey period. That said, this represents a stabilisation following the brief dip reported last time (-17% in January). Looking ahead, near term sales expectations moved into marginally positive territory at +6%, marking the strongest reading for this series since October last year.
Expectations are most upbeat in Wales, Northern Ireland and Scotland. At the twelve month time horizon, a national net balance of +16% of respondents now anticipate a rise in sales volumes, the strongest net balance since February 2020.
Nigel Purves, CEO of Wayhome commented: “Despite the efficient vaccine rollout and roadmap out of lockdown, clearly hopeful sellers were still hesitant to actively list their properties, with buyer enquiries and sales also subdued last month. Indeed, house prices rose to +52%, a modest increase on +49% in January.
“Going forward, we should see aspiring homeowners start to warm up to the idea of turning property enquiries into full purchases, and with the stamp duty and Mortgage Guarantee announcements, we can expect to see even more demand throughout the springtime period.
“That said, this will not be the case for everyone and many will be dismayed to find that even with the 95% mortgage scheme, their household income still doesn’t meet the criteria needed to get their mortgage approved, despite them being able to afford the deposit or a similar amount in rent each month. To truly turn 'Generation Rent' into 'Generation Buy’, it’s critical the industry identifies and brings awareness to alternative routes onto the property ladder.”
