DECEMBER 2017: UK RESIDENTIAL MARKET SURVEY
Headline activity indicators remain subdued for now
- National price balance edges upwards but agreed sales slip
- Twelve month outlook for prices and sales more upbeat
- 86% of respondents report no response yet from first time buyers following changes to Stamp Duty
The December 2017 RICS UK Residential Market Survey results continue to display a lack of momentum. Near term activity indicators reported on are still either broadly flat or slightly negative. That said, there is a more sanguine tone to those series capturing medium term expectations.
When disaggregated, the price gauge for London remains in negative territory albeit less so than in any month since April last year. Meanwhile. In most other areas, survey results point to further price growth with the strongest figures being reported in Wales, Northern Ireland, the North West and the Midlands.
The three month price expectations series remains negative at the national level highlighting a lack of conviction surrounding the near term outlook. The London reading remains the most negative (although it is again less so than it has been for some months) with the strongest results coming from Wales, Northern Ireland and Scotland. Significantly, over the coming year; respondents expect prices to increase in all areas with the exception of London (where prices are still expected to decline).
Turning to activity, new buyer enquiries edged lower during December having stabilised somewhat in the previous report. What’s more, when contributors were asked whether they have seen an immediate increase in first time buyer enquiries following changes to Stamp Duty in the Autumn Budget, an overwhelming majority of 86% across the UK as whole said they hadn’t (although this may have been influenced by the Christmas holidays)
Agreed sales also fell at the national level.Significantly, Scotland, Northern Ireland and the North East region were the only areas to have seen a pick-up in transactions over the month, whereas sales trends were either flat or negative across the rest of the UK. Sales expectations nationally remain flat over the coming three months. However, respondents are more optimistic over the twelve month horizon. Indeed after remaining broadly flat in the previous five months, sales expectations are now notably more positive and activity is anticipated to pick-up across all regions/countries (with London recording its first positive reading since last June).
An additional question was included in the survey designed to capture the likely impact on the market over the coming months following the Stamp Duty change. Nationally, the majority of respondents (66%) anticipated it having little consequence, whilst 12% felt it would result in higher overall activity. In London, 48% envisaged not much response, with a higher proportion of respondents compared to the national figure (28%) saying the changes will increase overall market activity. The results for the wider South East are closer to the national picture.
Looking at supply, new instructions to sell continued to decline, extending a run of 23 months in which this series has not posted a positive reading. Comments from respondents continue to emphasise the adverse impact this is having on the market. Average stock levels on estate agents books remained broadly steady, still close to historic lows. Contributors were asked to compare the number of appraisals undertaken over the month with the same period last year. In December, the largest share of respondents (46%) stated that appraisals were lower. However 23% noted that appraisals were higher on a like for like basis; this compares to only 15% of respondents in November that cited an increase in appraisals, signalling a possible improvement for the new instructions pipeline in the near future.
December was quiet as it normally is. There remained a shortage of new instructions and prices were stable but demand has slackened off. We had a number of new instructions scheduled for the New Year.
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