New buyer enquiries post most positive result in over two years
The UK housing market continues to show signs of gradual improvement with the latest Residential Market Survey from the Royal Institution of Chartered Surveyors (RICS) indicating an uptick in buyer demand and a more positive outlook for sales expectations, as well as stabilising house prices.
The report revealed that new buyer enquiries increased in March, with a net balance of +8% of respondents noting a rise, marking the most optimistic result since February 2022. The supply of new listings on the market has grown for four consecutive months, with a net balance of +13% of survey participants observing an increase in new instructions.
Expectations for sales volumes over the next three months are positive, with a net balance of +13% of respondents anticipating a rise, an improvement from +6% previously. Over a 12-month period, a significant +46% net balance of respondents expect an increase in sales activity, up from +42% in February.
The RICS survey also found the downward trend in house prices decelerating for the past seven months, with the net balance improving from -67% in September 2023 to -4% in March 2024, indicating a stabilisation in house prices across the UK.
In the lettings market, tenant demand remained positive in March, with a net balance of +19%. However, landlord instructions are still low, with a net balance of -19%, leading to an expectation among 34% of respondents that rental prices will rise in the next three months.
“Demand continues to recover gradually across the UK housing market, with new buyer enquiries rising for a third month in succession according to the latest survey feedback,” said Tarrant Parsons (pictured), RICS senior economist.
“With the inflation backdrop turning a little less difficult of late, this has led to expectations that the Bank of England will be able to start lowering interest rates later in the year. This should continue to support the market to a certain degree going forward.
“In keeping with this, near-term sales expectations point to an improving outlook, albeit the scope for an acceleration in activity will still be relatively limited given mortgage rates are set to remain much higher than in 2020/21.”
Meanwhile, Sam Rees, RICS senior public affairs officer, expressed support for the government’s inquiry into the home buying and selling process that seeks to examine its effectiveness and potential improvements
“As the activity in the housing market increases, we welcome the inquiry into how the home buying process can be improved for consumers,” Rees said. “RICS members working as agents and surveyors play a vital part in providing professional advice, ensuring that consumers are well informed on what for many is the most expensive purchase they will make. Their expertise will help shape the RICS recommendations and evidence to the inquiry committee this month.
“As a founding member of the Digital Property Market Steering Group, we are already working across the sector to identify ways that consumers and industry professionals can have access to the necessary information needed to buy and sell a home, reducing fall throughs and transaction times.”
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