December  2018: UK Residential Market Survey

Near Term Sentiment Continues to Deteriorate


  • Enquiries, agreed sales, and new instructions all soften again over the month
  • Sales expectations point to a further decline in near term activity
  • Headline price net balance slips slightly deeper into negative territory


The December 2018 RICS UK Residential Market Survey results show the year ending on a weak note, with key activity indicators continuing to slip at the headline level. Political uncertainty is increasingly being cited as a constraint on the market, alongside the well-established challenges around affordability and a lack of stock available for purchase. New buyer enquiries reportedly fell for a fifth month in succession. This decline in demand was again matched by a deterioration in the flow of fresh listings coming onto the market, as the survey’s indicator on new instructions remained in negative territory for the sixth report in a row. Looking back further, new instructions to sell have now declined in 19 of the previous 24 months. Given this, it is little surprise that stock levels on estate agents books remain close to record lows, currently standing at an average of just 42 properties per branch. Meanwhile, the proportion of respondents seeing a decline in the number of appraisals undertaken over the month continues to heavily outweigh those reporting a rise. As such, the pipeline for sales instructions going forward still appears to be worsening. On the back of these subdued trends, national sales volumes also continued to dwindle according the latest results.

Near term sales expectations are now either flat or negative across all parts of the UK, with the However, sentiment towards the twelve month outlook is not so downbeat, with the year-ahead expectations series actually turning positive for the first time since May. This could be suggesting that a lot of the near term pessimism is heavily linked to the lack of clarity around what form of departure the UK will take from the EU in March. Either way, sales trends are expected to improve across much of the UK over the coming twelve months, led by the strongest sales growth projections from respondents across the North West, the West Midlands and the South West. In terms of prices, the headline indicator slipped slightly deeper into negative territory during December. This marks the fourth consecutive negative reading and is also the weakest since August 2012. With the exception of London and the South East, prices are anticipated to either rise or hold steady, right across the board.