RICS RESIDENTIAL MARKET REPORT
Steadier demand and tight supply push price expectations higher
Supply conditions tighten again in most areas
Demand stabilises following recent falls in buyer enquiries
Twelve month price and sales expectations move upwards
The February RICS Residential Market Survey shows a slight pick up in price momentum. London remains the only region where more surveyors are reporting prices to have fallen rather than risen over the past three months.
However, even in the capital the rate of decline has moderated substantially.
Northern Ireland and Scotland continue to outperform all other areas in terms of price growth thanks, in part, to the resilience of demand.
The RICS new buyer enquiries series shows demand stabilising at the headline level after seven consecutive negative net balance readings. The divergence across the country is becoming less pronounced with most parts now seeing some rise in enquiries. On the supply side of the market, conditions tightened once again with a net balance of 8% of respondents seeing fewer new instructions to sell (when measured on a seasonally adjusted basis). New instructions fell in most areas with anecdotal evidence suggesting that political uncertainty may be adding to the supply constraints by causing some vendors to hold off putting their properties on the market.
The combination of subdued demand and a lack of property coming to market has kept sales activity muted recently. Despite this, sales expectations remain more upbeat at the headline
level with a net balance of 10% of respondents envisaging a rise in transactions over the coming three months. Near term expectations are positive across all areas except London,
the South East and East Anglia, where political uncertainty may be weighing more heavily on the market due to higher price levels in these parts of the country than elsewhere. At the twelve month horizon, sales expectations remain firmly positive across all areas of the UK. In the East Midlands, expectations turned slightly negative for the first time in two years as 9 successive months of falling buyer demand weigh on the outlook for prices. London is the only other region where respondents envisage price falls in the near term but at the twelve month horizon the outlook has improved across most areas. On average respondents expect to see prices rise by 2.4% over the coming year and by an average of 4.5% per annum over the course of the next 5 years (compound rate of around one quarter).
There has been an increased interest particularly in the £300,000-£450,000), but also for the larger properties (£500,000 +) which have been slow during November and December. Flats, in all categories, still need to be competitively priced.
Mortgages, apart from not being easy to obtain, they are also still taking time to get through.
Please do not hesitate to contact me should you wish to discuss any matter regarding the marketing of your property.
Oliver Miles FRICS FCABE
RICS Registered Valuer