EXPECTATIONS CONTINUE TO RECOVER
• House price inflation regains some momentum
• Sales hold steady over the month
• Buyer enquiries and sales instructions continue to slip albeit at a greatly reduced pace
The August 2016 RICS Residential Market Survey results suggest confidence continues to recover gradually following a significant drop immediately after the EU referendum. Prices and sales volumes are now expected to rise going forward, both at the three and twelve month time horizons, with a more stable trend in activity driving the improvement in sentiment.
Looking ahead, national near term price expectations climbed into positive territory for the first time since April, with a net balance of 10% of respondents now anticipating prices will rise over the coming three months. Nevertheless, expectations remain generally modest across the UK. Contributors are projecting prices in the North East to slip a little further in the near term but London expectations have now stabilised. Further out, over the next twelve months, prices in the capital are projected to see little change, while all other parts of the UK are expected to see house prices drift higher.
The real shortage of property for sale remains an overriding feature of the market and also a key factor supporting prices. This looks set to persist for a while yet as new instructions to sell declined once again during August, albeit only marginally. As a result, average stock levels on estate agents books slipped for the third successive month and now stand within a whisker of the record low posted in December of last year.
Alongside this, new buyer demand decreased slightly at the national level, although the pace of decline eased significantly.
In an extra question included in this month’s survey, contributors were asked for a more detailed breakdown of changes in new buyer enquiries over the past three months - looking at trends across different categories of buyers. The results show enquiries from buy-to-let investors dropped most sharply. Over the same period, demand from first time buyers and existing owners also reportedly fell, but to a smaller degree.
Following a couple of months in which sales declined sharply in the aftermath of the referendum, volumes stabilised during August, as the agreed sales indicator improved.That said, sales still appear to be falling in parts of the country, London and the West Midlands in particular, but the pace of decline has slowed in each case. Going forward, the sales expectations series (three months ahead) improved noticeably, posting the strongest reading since February. Furthermore, at the twelve month horizon, sales projections have now climbed out of negative territory across all areas of the UK.
The market has been relatively buoyant despite it being school holiday time with sales still being achieved. But there is a shortage of properties coming up for sale.
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