MOMENTUM STILL SOFT TO START THE YEAR

 

  • Enquiries, sales and instructions series remain negative
  • Prices edge higher at the national level but continue to decline in some parts of the country
  • More expensive tiers of the market still experiencing tougher conditions

 

The January 2018 RICS UK Residential Market Survey results show the year starting off in a very similar vein to the closing stages of 2017. New buyer enquiries, instructions and sales all continue to drift lower while near term expectations point to a flat outturn for activity in the coming months. Having said that, there is a little more optimism regarding the twelve month sales outlook which is now at least modestly positive in virtually all parts of the country.

For a tenth month in succession, new buyer enquiries declined and newly agreed sales also slipped, extending a run of negative readings for this indicator stretching back to last February. Going forward, a relatively stable sales trend is expected to emerge in the near term, while respondents envisage sales picking-up over the next twelve months as a whole, albeit it is relatively modest when viewed in a historical context.

The lack of new instructions coming to market continues to impede activity and this has shown no sign of turning in recent months. Indeed, the January net balance was the weakest since May 2017, pointing to a further deterioration in the flow of fresh listings for a fifth successive report. Unsurprisingly, the average number of properties on estate agents’ books continued to slip back towards the record low levels seen around the middle of last year. The pipeline for instructions going forward does not appear to be much stronger either, with many respondents noting the number of valuations undertaken over the month was below the equivalent period of last year.

At national level, prices have resumed on a modest growth trajectory in each of the past two months. Nevertheless, regional trends continue to differ significantly from the headline average. Indeed, the price gauge in London remains comfortably in negative territory, while falling prices were also reported across the South East, East Anglia and the North East (albeit all to a much lesser extent than in capital). Conversely, the North West of England, Northern Ireland and Wales posted the strongest price growth compared to all other parts of the UK.

Survey feedback continues highlight more expensive tiers of the market to be experiencing particularly challenging conditions. Indeed, the majority of respondents noted sales prices coming in below asking prices for properties marketed at £1 million+. The most favoured response was that prices were between 5% and 10% below.

For properties listed between £1million and £500k, just over half  of respondents cited sales prices coming in below asking, with just under half saying prices achieved were up to 5% below. Finally, for properties marketed at up to £500k, the majority of contributors noted sales prices were coming in at the same level as asking prices or slightly above, although a still significant number said they were below.

With regards to the near term outlook for prices, three month expectations remain flat, pointing to the pace of growth potentially easing in a number of areas. However, further out, at the twelve month horizon, expectations are positive in eleven of the twelve regions/countries covered by the survey. London was again the exception, although the net balance of respondents anticipating further declines in the capital at least turned less negative.

Locally

 

January was busy for sales, particularly with properties under £300,000 but there remained a shortage of new instructions and prices were stable.

 

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