SEPTEMBER 2016: UK RESIDENTIAL MARKET SURVEY BUYER ENQUIRIES BEGIN TO PICK-UP MODESTLY
• Buyer demand increases for the first time in seven months although conditions vary across the UK
• House prices continue to rise while new instructions remain scarce
• Downward trend in sales eases with expectations continuing to improve
The September 2016 RICS Residential Market Survey results show new buyer enquiries increased for the first time since February, albeit the pick-up was only modest. Alongside this, new instructions to sell slipped further, with the lack of supply firmly underpinning prices. What’s more, price expectations rose at the three and twelve month horizons, although both indicators remain softer when compared to the start of the year.
Looking ahead, near term price expectations continued to recover gradually, with the national series posting the strongest net balance since March. Conversely, three month price expectations slipped back into negative territory across London, after registering a broadly neutral reading in the previous report. Anecdotal evidence suggests that uncertainty following the EU vote, along with Stamp Duty changes, is both continuing to adversely impact the top end of the market in particular.
New buyer enquiries increased for the first time in seven months. Nevertheless, this masks considerable variation across the UK, with some agents seeing a more stable trend in demand emerging as opposed to any recovery just yet.
Alongside this, new sales instructions fell once more, marking the seventh straight month in which new listings have declined. In fact, with the exception of a few months around the turn of the year, the flow of new stock coming to market has dwindled continuously over the past two years. As such, average stock levels on estate agents books remain exceptionally low. Consequently, the imbalance between marginally increasing demand and a real lack of supply is firmly underpinning prices. In addition, the lack of choice for would-be purchasers also appears to be restricting overall sales market activity.
Indeed, nationally, agreed sales were broadly unchanged for a second month running having declined sharply from May through to July. The regional picture remains mixed however, as transactions rose in six of the twelve regions/countries covered in the survey and fell across the remainder. Going forward, respondents’ optimism towards the sales outlook improved, with growth expected across most parts of the UK over the next three months. Further out, over the next twelve months, contributors are projecting sales to pick-up firmly in all areas.
On a UK-wide basis, about 60% of respondents feel house prices are around fair value at present, although approximately 40% do feel their local market is overpriced to some extent.
The local market generally reflects the above, in that there was a shortage of new instructions and prices were stable. Sales are being negotiated at strong prices provided realistic pricing.
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