APRIL 2017: UK RESIDENTIAL MARKET SURVEY
Key indicators show little near term impetus
• Newly Agreed Sales and New Buyer Enquiries series edge lower in April
• No evidence of more stock coming to the market at this stage
• Forward looking metrics point to little near term change
The April 2017 RICS UK Residential Market Survey results show momentum continuing to ebb, with sales declining slightly over the month and the new buyer enquiries series edging lower. Meanwhile the flow of fresh listings to agents (new instructions) weakened further. Anecdotal evidence, highlighted in the comments of some respondents to this survey, suggests that the calling of an early election may have created an added layer of uncertainty in the market although there is also a sense from others that the impact may be somewhat less marked than in the past. In addition, once again prevalent in the feedback are references to the ramifications of stamp duty changes for sales particularly at higher price points.
Steadily rising house prices are occurring nationally, with the pace of growth having remained essentially unaltered over the past five months. However, the UK-wide gauge does mask variation across regions. Indeed, the reading for central London prices has now lingered in negative territory for thirteen months in succession (albeit the latest reading was less negative than previously).
Elsewhere, house price inflation across East Anglia has slowed noticeably in recent months and, along with the North East, was one of only two other regions in which prices were not reported to have increased. At the other end of the spectrum, the North West again returned the strongest positive net balance, with respondents noting higher (rather than lower) prices in the April report.
Back at the national level, near term price expectations eased over the month, with the net balance moderating. This was the softest reading since July 2016 and suggests contributors anticipate a slower rate of house price inflation in the three months ahead. Notwithstanding this, the twelve month view remained firm and all parts of the UK are expected to see some growth in house prices.
An acute shortage of stock remains a key factor underpinning prices for the time being. Average properties on estate agents books continue to hover close to record lows, while the headline indicator on new sales instructions remained negative for a fourteenth month in a row. Interestingly, instructions have now reportedly picked-up slightly in London in each of the last two months (in net balance terms).
The lack of choice for would-be buyers across the UK appears to be one influence dampening overall sales market activity. New buyer enquiries were again broadly unchanged and have now failed to see any meaningful growth since November of last year. Alongside stagnant demand, the latest figures point to agreed sales starting to slip (modestly) following a number of months of static transactions. Meanwhile, the average time taken to finalise a transaction (from listing to completion) did improve slightly from 17 to 16 weeks.
Going forward, national near term sales expectations are signalling a continuation of this flat picture over the coming three months. What’s more, projections moderated to a greater or lesser degree in virtually all areas relative to the previous report. Nevertheless, the twelve month outlook appears somewhat brighter, with 31% more respondents anticipating a pick-up in sales (rather than a decline) over the year ahead.
In April we found the market reflected the national trends, with sales declining slightly over the month and the new buyer enquiries series edging lower. However new instructions and market appraisals have increased in May, but the General Election may slow matters up.
Please do not hesitate to contact me should you wish to discuss any matter regarding the marketing of your property. Oliver Miles FRICS RICS Registered Valuer