Uncertainty stifles market sentiment

• Price growth loses momentum most notably in the south of the country
• Activity indicators point to flat sales trend continuing over the coming months
• Average inventory levels hit a new low highlighting ongoing supply shortage

The June 2017 RICS UK Residential Market Survey points to a further deceleration in house price inflation at a headline level although this masks significant regional variations.  At the same time, the more cautious tone of respondents regarding sales activity shows little signs of turning with the net balances for new buyer enquiries, new instructions and agreed sales still stuck in negative territory. Significantly this is now also being reflected in the twelve month sales expectations indicator where the net balance reading has slipped to its lowest level since the immediate aftermath of the referendum.
In the activity indicators, respondents once again recorded a decline in newly agreed sales.This is the fourth consecutive negative reading and reflects both a lack of stock coming on to the market and a more cautious stance from buyers over recent months.
Significantly new instructions fell again, this is the sixteenth month in a row that more contributors have indicated property coming into the market has dropped (rather than risen).  Against this backdrop, average stock levels have slipped (albeit only very marginally) to a new low.
The June survey included additional questions in an attempt to gather further insight regarding the generally flat trend in activity.  At a national level, almost half of the contributors identified domestic political uncertainty as the biggest factor explaining the current state of the market. This compares to approximately one quarter who highlighted Brexit as the most important factor influencing the picture.
Looking forward, transactions in the near term (next three months) are expected to remain broadly stable with a few expecting an increase in sales nationally (rather than a fall). Meanwhile, there is now also a little more caution in terms of the outlook for sales growth over the next twelve months..

The market still remains fragile with the uncertainty of Brexit, Government and the general economy. New instructions are slow but this may be because of upcoming summer holidays. Sales are still taking place but viewings are less albeit they are usually genuine but we are now school holidays and it will be interesting to see if these increase.

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