Sales market ‘still lacking impetus’ as stock levels hit a new low – RICS

Estate agents now hold an average of just 43 unsold properties on their books per branch

The UK housing market “continues to lack impetus”, says the Royal Institute of Chartered Surveyors, with new buyer enquiries and agreed sales “stagnant” in March – for the third month on the trot.

Stock levels have hit a new record low as the number of properties coming on to the market dropped again, leading surveyors to think a bitt less rosily abut the future. 13% more respondents to RICS monthly survey of surveyors reported seeing a fall in fresh listing rather than a rise over the last month. Stock on estate agents’ books has consequently dipped to a new record low with branches (on average) now holding only 43 unsold properties.

While that short supply means house price growth has picked up in some regions (notably the North West), property values continue to slip in London. The capital has, however, seen buyer interest brightening – albeit “modestly” – over the last four months.

Prices in central London have progressively deteriorated and, at -49%, the net balance from RICS survey was the weakest since 2009. Nevertheless, 14% more respondents from London anticipate prices will be higher in twelve month’s time.

Further ahead, sales expectations over the next 12 months were reduced with 24% more respondents predicting a rise — down from +37% in February. Moreover, expectations for year ahead sales growth were reduced in eight of the twelve UK regions/countries covered.

In the lettings market, tenant demand continued to rise as 11% more respondents noted an increase (rather than a fall) on a non-seasonally adjusted basis. Even so, demand growth remains more modest than in March 2016. New landlord instructions also remain in negative territory for a sixth straight month, and the imbalance between supply and demand continues to drive rents upwards. Surveyors anticipate further growth in rents in virtually all areas over the next twelve months with the exception of the capital, where rents are anticipated to continue to decline over the near term.

Simon Rubinsohn, RICS Chief Economist: “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.

“For the time being it is hard to see any major impetus for change in the market, something also being reflected in the flat trend in transaction levels.”

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Street views

  • Colin Townsend MRICS, Malvern, John Goodwin: “A hectic market on both new listings and sales achieved. In many cases we have several buyers bidding for the same property. Not enough stock with very high demand. A recipe for another year of inflation the housing market.”
  • Donald Leslie MRICS, Amersham, Donald Leslie and Co Ltd: “The market is weak but low availability is masking this and keeping prices high. Some properties sticking on the market for weeks others attracting competitive bids.”
  • E M Rook MRICS, Sevenoaks, Knight Frank: “Stamp duty still responsible for the decline in number of transactions.”
  • Ian Perry FRICS, Faringdon Fairford Lechlade Highworth Witney, Perry Bishop and Chambers: “After a slow start to the year both sales and exchanges have surged ahead.”
  • James L Farrance MNAEA, FARLA, Maidenhead, Braxton: “The past month has seen a notable increase in buyer interest and positive sentiment in the market place.”
  • Joanna Todd MRICS, Newbury, Sonas Surveyors: “The higher the value the less interest.”
  • Christopher Bailey MRICS, Exeter, Knight Frank: “It would appear that buyers have been holding off until the Chancellor’s Spring statement and any changes to SDLT. With that now behind us, buyers are active again but there remains a shortage of quality stock.”
  • Clive Pearce AssocRICS, Truro, Clive Pearce Property: “Good demand, weak supply.”
  • David Lewis Bsc hons, West Devon and East Cornwall, Stags: “Demand remains high, and the spring market has added extra ‘bite’, although condtions at the upper end remain weak.”
  • Ian Perry FRICS, Cheltenham Cirencester Nailsworth Stroud Tetbury, Perry Bishop and Chambers: “After a slow start to the year both sales and exchanges have surged ahead.”
  • James Wilson MRICS, Shaftesbury, Jackson-Stops and Staff: “Activity is on the up with more instructions and sales agreed under £1m.”
  • Mark Annett FRICS, Chipping Campden, Mark Annett & Company: “It is very busy with enquiries. All sales achieved show at a 5% – 10% price reduction; a very price sensitive market but lots to do!”
  • Matthew Harvey MRICS, Bourton On The Water, Tayler & Fletcher: “Sales progression remains the key problem from agreeing a deal to exchange of contracts. This is made significantly more dificult by poor online agents & conveyancing services.”
  • Roger Punch FRICS, South Devon, Marchand Petit: “Despite the increase in new instructions demand still outstrips supply – Spring is certainly in the air.”
  • Anthony Webb FRICS, Cobham, Surrey, Trenchard Arlidge: “Market activity and sales over £1m still very slow due to excessive SDLT combined with Brexit uncertainty.”
  • Christopher Ames MRICS, Belgravia /London Sw1, Ames Belgravia Ltd: “February and March have shown some renewed confidence and sales agreed -especially now that the Brexit timetable is announced.”
  • J.J.King FRICS, Wimbledon, Andrew Scott Robertson: “Level of instructions have increased and that has had the desired e ect on applicant levels. March ended on a high with the number of offers received, although resistance by vendors to accept is holding the market back.”
  • Jeremy Leaf FRICS, Finchley, Jeremy Leaf & Co: “We recorded more stock and applicants this month with fewer able to proceed, often due to problems selling existing homes. Sellers are more realistic when considering offers than three months ago as Brexit uncertainty is compromising confidence for some.”
  • Robert Green MRICS, Chelsea, John D Wood & Co: “March saw a real pickup in sales in Chelsea as spring gets underway. The pound, which buyers feel is unlikely to get weaker, and more realistic asking prices are the main reason. SDLT still a major inhibitor of transactions at the upper levels.”
  • Simon Aldous MRICS, London, Savills: “The rate of price falls across prime central London have slowed, transaction levels in our central offices are up. Price falls have stabilised in our outer London offices, but there still significant downward pressures at above £2m.”
  • Terence Osborne FRICS, SW1, Tuckerman Residential Ltd: “Clearly Brexit has had an impact and in order to achieve sales, vendors must be realistic. In our particular area, the huge number of brand new ats is having an e ect, creating a distinct two tier market.”
  • Toby Whittome, Chelsea, Jackson-Stops and Staff: “Sentiment unlikely to change from poor to good for some time. Stamp duty levels continues to kill market activity.”