Buyer demand has nudged up for the first time in seven months as general confidence in the market outside London continues to recover, according to the latest poll of chartered surveyors, although its still a mixed pictures across the regions.
Surveyors are reporting a “significant turnaround” in new buyer enquires between September and the depths of Brexit-vote inertia, although the RICS flags that “in relative terms the pick-up was modest” – and that it seems patchy across the country.
Supply has continued to dwindle, however, with fewer new instructions showing in September compared to the previous month in a continuation of a trend that’s now been in play since mid-2014 (except for that pre SDLT surcharge surge before April). As a result, the average level of stock on estate agents books remains close to historic lows at just over 45 properties.
And that means prices are still being pressured upwards. A net balance of 17% of surveyors said prices rose in September, compared to 13% in August.
Over the next three months, nationally, house prices are predicted to rise further with 14% more RICS respondents expecting to see an increase. This is the strongest reading since March and compares with +9% in August.
As ever, the capital tells a slightly different story: central London is still a cautious place, where prices are expected to fall through the tail-end of the year – “albeit only modestly”, with the top-end facing the toughest climate thanks to continued stamp duty fallout and uncertainty over Brexit etc.
The lack of choice for would-be purchasers also appears to be restricting overall sales activity for the time being. Nationally, agreed sales were unchanged for a second month having declined sharply from May through to July.
Looking ahead, surveyors seem a bit more upbeat, with sales market growth expected across most parts of the UK over the next three months. Further out, over the next twelve months, contributors are projecting sales to pick-up firmly in all areas.
Simon Rubinsohn, RICS Chief Economist: “The market does now appear to be settling down following the significant headwinds encountered through the spring and summer. Buyers do appear to be returning, albeit relatively slowly, but the big issue that continues to be highlighted by respondents is the lack of fresh stock on the market. Although this is not a new story, it is a significant one having ramifications for both prices and the level of turnover.
“Central London remains something of an outlier with contributors telling us this is the one part of the market where there may be further give on prices in the near term. Elsewhere the price trend still seems on the up.”
Surveyed surveyor comments on the September market
- Robert Green MRICS, John D Wood & Co., Chelsea
“Activity picked up in recent weeks for new instructions and properties where prices have been reduced to match market conditions. Buyers are now willing to commit in great numbers. We have seen competitive bidding on realistically priced property.”
- Simon Aldous MRICS, Savills, London
“There are downward pressures across all prime London markets. We have already seen so far price falls of around 5% this year, we believe this is going to continue through to the end of this year. There are a lot more properties on the market.”
- E Rook MRICS, Knight Frank, Sevenoaks
“Stamp duty still stalling the market.”
- James Dawson MRICS, Jackson-Stops, Newbury
“More enquires being generated and more appraisals within the last month, but each sale is taking longer and proving more complicated than in the past.”
- Andrew Turner AccocRICS, Countrywide, London
“Quieter over the summer holiday period, now starting to pick up. Re-mortgage applications increasing following the rate drop.”
- Chris Gooch MRICS, Carter Jonas, Winchester
“Market activity in September has been encouraging after a lacklustre summer.”
- Clive Rutland FRICS, Moses Rutland, Southampton
“There is a dearth of instructions with little choice on the market, but an adequate, albeit reducing, number of buyers. Repayment mortgages are a brake on the market. Investors willing to pay extra costs to get a still reasonable return.”
- Chris Philpot FRICS, Lacy Scott and Knight, Stowmarket/Suffolk
“The late summer has seen some ne houses coming to the market and attracting much interest, but it needs a positive attitude. Those who are committed will achieve a move, but the waverers may be disappointed.”
- Mark Annett FRICS, Mark Annett and Company, Chipping Campden
“Brexit has made no difference so far. We have been busy as per normal autumn market. Supply and demand is at work.”
- Peter Sinclair MSc MRICS, Connells Survey and Valuation Ltd, Cheltenham/Gloucester/ Cotswolds
“No significant slowdown in number of instructions coming through and prices still going over the asking price, mainly due to a shortage of supply.”
- Simon Barker MRICS, Knight Frank, Sherborne
“Post-Brexit appears to be dampening activity in the Autumn market. The immediate effect of the referendum was hardly noticeable.”
- Simon Cooper FRICS, Stags, Exeter
“September was the best month of the year for exchanges though sales a little lower than the previous September. 2016 has been a massively better year than 2015, despite Brexit.”
- Stephen Morris MRICS, Davies & Way, Bristol & Bath
“A noticeable cooling is activity for larger houses (£500,000 plus) where sellers are having to be realistic and take advice to achieve sales. Lower price ranges remain buoyant with prices still increasing.”
- Christopher Ames MRICS, Ames Belgravia Ltd, Belgravia SW1
“Hopefully the Brexit timetable announced this week will assist market con dence. The upper end of the market in London has not yet recovered since the Dec 2014 SDLT increase. The extra 3% for second homes from April 2016 is having an impact this year.”
- Ian J Fergusson BSc FRICS, SBVS, London/UK
“The long drag post-referendum is still an influence on house prices, however, more impact has been caused by stamp duty changes and tax on second homes plus lack of homes for sale.”
- James Gubbins MRICS, Dauntons, Pimlico
“Some vendors are inclined to entertain offers in the belief that the market may soften in the wake of increased stock levels. Certainly those continuing to be over ambitious with their prices are struggling to sell.”
- James Perris MRICS, De Villiers, Central London
“Whilst activity is back to pre-referendum levels, market conditions remain challenging with buyers cautious and the high transactional costs preventing much activity at the upper tiers of the market.”
- Jeremy Leaf FRICS, Jeremy Leaf & Co, Finchley
“The market proved to be quite resilient for buyers and sellers returning from holiday in September with solid exchanges of contract. Listings have increased considerably although there seems to be little buyer urgency to commit quickly.”
- John King FRICS, Andrew Scott Robertson, Wimbledon
“September was surprisingly active. Sales agreed up, as are instructions, but expecting this level to fall unless price reductions occur more frequently.”