The monthly RICS UK Residential Market Survey continues to show a subdued housing sales market in the South East with a lack of newly agreed sales and new buyer enquiries. However, 15% of the region’s agents expect prices to increase over the coming 12 months, indicating a possible pick-up in the market post-election.
During the month of October, 21% of agents in the South East reported a fall in new buyer enquiries, with newly agreed sales remaining negative for the third month in a row. Looking at the different areas of the UK, sales dipped across virtually all parts apart from Northern Ireland, where contributors noted a marginal increase.
In more positive news looking ahead, 4% of agents in the South East expect to see sales increase over the coming three months (up from -14% in September).
As the UK continues to struggle with housing supply, 45% more respondents noted a fall in new instructions to sell in the South East last month. This decline in sales stock was reflected across the whole of the UK. In addition, 49%, of survey participants reported an annual decline in the level of market appraisals undertaken which is the most negative since the series began in 2017.
Moving to prices, 8% more respondents reported a fall in house prices last month and 11% expect to see prices fall further over the coming three-months. Comparatively, prices in Northern Ireland, Wales, Scotland and the North West of England are expected to grow over the coming year.
Tony Jamieson, MRICS, of Clarke Gammon Wellers in Guildford, said: “The current political and economic uncertainty means that both vendors and purchasers are “waiting to see what happens” and therefore are not committing to sell or buy, other than those forced to do so. Prices have fallen but have stabilised.”
In the lettings market, 22% of respondents in the South East saw an increase in tenant demand, yet landlord instructions failed to pick-up, resulting in 16% of contributors expecting rents to rise over the coming three-months. Interestingly, the survey revealed that rental growth expectations for the near term have strengthened across all UK regions – due to rising demand outstripping supply – with all UK regions projected to see an increase in rents over the coming three months.
Simon Rubinsohn, RICS chief economist, said: “The latest survey feedback continues to suggest that both buyer and seller activity remains in a holding pattern, hampered by political and economic uncertainty. Given the upcoming general election next month, it appears unlikely that these trends will pick-up to any meaningful extent over the remainder of this year. The picture remains very different on the lettings side however, with tenant demand gathering momentum over recent months. This is running against an increasingly tight supply backdrop for rental properties and seems set to squeeze the pace of rental growth higher going forward.”