UK housing market set for “flat summer”

The UK’s housing market is set for a “flat summer”, the RICS has warned.

The latest RICS survey shows that momentum is starting to ebb in the UK housing market, with sales dipping and buyer interest remaining flat in April.

Anecdotal evidence cites a lack of choice, uncertainty due to the calling of an early election and the ramifications of stamp duty changes as factors hampering activity.

The lack of supply for sale is one of the biggest factors, suggests the RICS survey, with new instructions remained negative for a fourteenth month in a row at the national level. 15 per cent more respondents saw new instructions drop in April, and perhaps consequently, new buyer enquiries were unchanged nationally having failed to see any meaningful growth since November 2016.

“Although the picture clearly does vary across the country, the bulk of the feedback we are receiving points to a fairly flat summer for both activity and prices,” concludes Simon Rubinsohn, RICS Chief Economist.

“Lack of stock on the market remains a key challenge for the sector with recent and forthcoming tax changes having a material impact on transaction levels, particularly at higher price points. Uncertainty relating to the forthcoming general election is also highlighted by some respondents as a reason for inertia.”

Looking ahead, chartered surveyors forecast that the stagnant picture for sales will continue for the next three months. 3 per cent more respondents expect to see a rise in sales over the time period. Expectations have moderated in virtually all areas of the UK when compared to the March survey. However, the 12-month outlook is more optimistic with 31 per cent more respondents anticipating a pick-up in sales over the year ahead at the national level.


Lack of supply continues to underpin UK house prices

24th April 2017

The ongoing lack of supply in the UK continues to underpin house prices.

According to the Royal Institution of Chartered Surveyors, the housing market continues to lack impetus, with new buyer enquiries and agreed sales stagnant in March. The number of properties coming on to the market, however, also dropped further, which continues to house price growth.

ew buyer enquiries in the UK were reported to be flat for a third successive month in March, and although the picture remains mixed across the UK, the areas with declining buyer interest outweigh those with increasing demand. The strongest growth in new buyer enquiries was seen in Northern Ireland and the South West (+34 and +22 net balances respectively); and, on a bright note for London, buyer interest has been increasing modestly over the last four months (+9 net balance in March).

New instructions to sell fell noticeably with 13 per cent more respondents seeing a fall in fresh listing rather than a rise over the month. Stock on estate agents books has consequently dipped to a new record low with branches (on average) now holding only 43 unsold properties.

Consequently, there has been an impact on sales activity with transaction volumes failing to rise across the UK in each of the last four surveys. Sales did, however, rise relatively firmly in Wales, Scotland and Northern Ireland. Going forward, the national near-term sales outlook also appears somewhat subdued (+16 per cent to +12 per cent in March).

The lack of supply in the market continues to underpin prices, with 22 per cent more respondents seeing a rise over the last month across the UK, however, the difference between central London and the rest of the UK continues to widen. If figures from the capital are excluded from the headline figure, price growth in the UK has accelerated since December and price rises in the North West are particularly strong.

Simon Rubinsohn, RICS Chief Economist, comments: “The latest results for our survey show little change in the underlying picture surrounding both sales and markets. High-end sale properties in central London remain under pressure, while the wider residential market continues to be underpinned by a lack of stock. This includes rents, which away from the capital are generally moving higher as demand outstrips supply.”


UK sales stay subdued for third month

10th March 2017

Sales of UK homes have stayed subdued for the third month in a row, according to the latest survey from the RICS.

The RICS February 2017 Residential Market Survey shows transaction volumes were broadly unchanged in January. New buyer enquiries were again flat and have now failed to see any meaningful growth since November 2016. Near term expectations remain positive but point to a relatively modest rise in activity in the months to come.

The headline price balance came in at 24 per cent in February, unchanged from a downwardly revised figure on January. Respondents in most regions reported an increase in prices with the strongest growth in the North West of England andnotable improvements in Northern Ireland as well. London and the North East of England remain the exceptions with momentum in the former deteriorating for the fourth consecutive month. In fact, surveyors have now reported a fall rather than a rise in London prices for a full year.

“Having moved into positive territory last September, new buyer enquires seem to have gradually lost steam over the past few months ending February on a flat eading. At a regional level, momentum remains strongest in the South West and weakest in the East Midlands,” says the report. “Meanwhile, the deterioration in the supply of new listings reported in January was confirmed once again this month with 14 per cent more respondents reporting a decline in instructions relative to the prior period’s 12 per cent.”

“With demand flat and the supply of new property continuing to slip, the national agreed sales indicator pointed to another steady month for transactions,” adds the RICS.

Near term expectations remain broadly unchanged at +16 per cent (from +15 per cent in January, and improve in the long-term: over the next 12 months, respondents across nearly all areas are more confident with a net balance of
37 per cent of contributors forecasting activity to rise. Wales and Northern Ireland report the strongest expected improvements, followed by Scotland and the North West of England.


UK housing market rebounds post-Brexit vote

12th September 2016

The UK housing market has rebounded following the post-Brexit vote dip, as confidence starts to recover.

The latest survey from the Royal Institution of Chartered Surveyors shows that the UK residential market experienced a slight upturn in August 2016. The report indicates a pick-up in confidence, following a significant drop in activity and price expectations in the wake of the EU vote. At the national level, both prices and sales are now expected to rise over the three and 12 month horizons as the market stabilises.

During August, 12 per cent more respondents reported an increase in prices (up from 5 per cent in July). Although this reverses a run of five consecutive surveys in which the net balance has decelerated (from a high of 50 per cent in February), it is still the second weakest reading over the past 18 months.

In London, the price net balance remained in negative territory for a sixth consecutive month, with 30 per cent more respondents noting a fall in prices over the period, as opposed a rise – but prices increased in most other parts of the UK.

Looking ahead, price expectations over the next three months nationally moved into positive territory for the first time since April with 10 per cent more respondents now anticipating an increase over the period. This slightly stronger picture is also reflected in price expectations for the coming year with modest increases anticipated in most parts of the country away from the capital.

Following a couple of months in which sales declined sharply in the aftermath of the referendum, volumes stabilised during August, as the agreed sales indicator improved to zero from -32 per cent. Sales expectations improved noticeably, posting the strongest reading since February and furthermore, sales projections at 12 months have now climbed out of negative territory across all areas of the UK.


UK house-hunters slow down amid Brexit uncertainty

15th July 2016

UK house-hunters slowed down this summer, as uncertainty surrounding the EU referendum impacted the market.

The latest RICS UK Residential Market Survey found that uncertainty fuelled by the Brexit vote caused activity to drop in June, with buyer enquiries falling for the third month in a row.

36 per cent more chartered surveyors nationally reported a fall in interest during the month, the lowest reading since mid-2008.

“The South of the UK has been the hardest hit, with anecdotal evidence suggesting both the EU result and the tax changes, which took effect at the beginning of April, as having an impact on sentiment,” says the RICS report.

Supply of property for sale also continued to fall, with the exception of Northern Ireland – 45 per cent more chartered surveyors saw a fall in new instructions in June – the steepest fall on record and extending a trend that has been in place since 2014.

Sales, as a result, dipped for their third month in a row, with RICS survey respondents expecting that trend to continue.

House price growth saw a reduction in June, although prices still continue to rise, fuelled by the underlying tension between supply and demand. Indeed, the majority of estate agents and property experts have all highlighted the unchanged fundamentals of the UK housing market. While near-term price expectations are now in negative territory across the whole of the UK, in the medium-term, the market’s fundamentals are expected to bolster property prices, even during uncertain times. London remains the only region where respondents are seeing prices fall, with this largely being concentrated in the central zones.

Over the next 12 months, the dip in prices is only expected to persist in London and East Anglia agrees the RICS, with a national cumulative increase of 14 per cent projected for the next five years.

“Big events such as elections typically do unsettle markets so it is no surprise that the EU referendum has been associated with a downturn in activity,” says Simon Rubinsohn, Chief Economist at the RICS. “However, even without the build up to the vote and subsequent decision in favour of Brexit, it is likely that the housing numbers would have slowed during the second quarter of the year, following the rush in many parts of the country from buy to let investors to secure purchases ahead of the tax changes.”

At the same time, investors from overseas are expected by many to step up their buying activity, as the weak pound effectively gives foreign purchasers a 10 per cent discount on UK property. Read more about that here.