Feedback from RICS members who were surveyed about the activity they observed last month suggests that a “more stable trend is now emerging in the UK housing market”. Whilst commentary from surveyors in some regions remains “downbeat”, highlighting the divergent conditions that have prevailed for over a year now, overall it would appear that buyer demand has edged up slightly in the past month. As a consequence, enquiries from prospective purchasers reached their highest level since 2016, following significant declines earlier this year. Correspondingly, new instructions from those who wish to sell their properties has also, for the most part, held steady.
Looking forward, twelve-month expectations in terms of both prices and volumes of transactions are positive, with a quarter of surveyors anticipating that values will increase over the course of the next year.
In the private rental sector, the ongoing exodus of landlords as a result of increased taxation and regulation once again meant a decrease in properties available for let in June, the twentieth month in a row where rental stock numbers have declined.
With tenant demand still increasing, rents have increased again in many areas, with RICS predicting that rental values will rise by 3.6 per cent on average each year for the next five years.
If true, this would surpass house price growth, which is predicted to rise on average by 2.7 per cent a year over the same period.
Simon Rubinsohn, RICS Chief Economist, commented: “The latest data provides further evidence of the sales market settling down, but I don’t get the impression from the insight provided by contributors that this is fuelling hope of a significantly more active market going forward
“Many of the factors that have provided a challenge during the first half of the year remain unresolved.”
Simon continued: “Meanwhile feedback on the lettings market continues to highlight the impact of the policy changes announced in recent years.
“Build to Rent should in time help take up some of the slack in parts of the country but the RICS indicators capturing rent expectations suggests there is no expectation this will be the case anytime soon.”
Jeremy Leaf, former RICS Chairman observed: “The RICS survey confirms what we’ve been seeing ‘on the ground’; an expected seasonal increase as some buyers look beyond Brexit and the present political uncertainty but only if they can perceive value. Clearly demand can only remain pent up for so long.” Jeremy concluded: “Nevertheless, we’re not seeing a substantial increase in activity yet, despite more valuation requests and listings.
“Many sellers are still struggling to come to terms with the new market reality of softening prices as well as fewer viewings and offers.
“On lettings, improved demand is emanating, particularly from aspiring first-time buyers finding it difficult to raise deposits and meet challenging lending criteria.”
Today’s more positive outlook from surveyors will no doubt provide a welcome boost to those in areas of the UK where the property market has been tough-going of late.
But just as one swallow doesn’t make a summer, we’ll need to see a lot more evidence that things are moving in the right direction across all regions before we can safely say, borrowing Boris Johnson’s phrase, we’re “going gang-busters”.
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