Find out if things are finally looking up…
Green shoots are starting to show up in the UK housing market, with the latest RICS UK Residential Survey showing buyer enquiries and new property listings on the rise, as well as house prices looking to be stabilising.
There was also noticeable improvement in sales activity compared to the previous year. However, the industry remains cautious due to ongoing interest rate uncertainties.
The survey highlighted a positive trend in buyer interest for the second consecutive month, with a +6% net balance across the UK, suggesting a recovery in market interest regionally over the past two months.
Despite a slight dip of -3% in agreed sales in February, the figures indicate a more robust sales trend than the average -22% net balance observed over the last 12 months. Future expectations are positive, with a +42% net balance of respondents anticipating an upturn in sales activity over the next year, with optimism spread across all UK regions.
A significant development reported in the latest RICS survey was the marked increase in new instructions to sell, the strongest since October 2020, contrasting sharply with the negative trends seen throughout 2023. Estate agents now report an average stock level of 42 properties, the highest since February 2021, attributed to a rise in market appraisals compared to the previous year.
While house prices continue to trend downwards across the UK at -10%, the rate of decline is stabilising, with the latest figures being the least negative since October 2022, having been as low as -67% in September last year.
London, in particular, is seeing a more noticeable improvement in price indicators. Over the next 12 months, a +36% net balance of respondents in England and Wales expect house prices to start rising.
“The February RICS survey provides some grounds for encouragement around the sales market with not just buyer interest staying positive for the second successive month but also the uplift in new instructions to agents,” said Simon Rubinsohn, chief economist at the Royal Institution of Chartered Surveyors.
“Whether the increase in stock coming back to the market will be sustained is likely to be a critical factor in explaining how things play out over the balance of the year, especially with new build likely to remain constrained.
“Significantly, the rise in the number of appraisals taking place points in the right direction. And the government will be hoping that this trend is given a boost by the change to CGT announced in the Budget.”
Meanwhile, in the rental sector, the increase in tenant demand continues, albeit at a slower pace, while landlord instructions are on the decline. This imbalance is expected to lead to a rise in rents, though at a moderated pace.
“There are signs that the relentless upward trend in private rents is losing momentum, but fresh demand is still comfortably outstripping supply in this area which suggests there is unlikely to any significant relief for tenants,” Rubinsohn said. “Indeed, feedback from respondents to the survey continue to highlight the challenges in the sector resulting from a whole host of measures introduced in recent years.”
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