A combination of rising buyer demand and growth in newly-agreed sales suggests that the UK housing market remains fairly stable, with a likelihood for potential increases in sales in the next 12 months, according to the Royal Institute of Chartered Surveyors (RICS). The survey was based on responses from Chartered Surveyors who operated in the residential sales and lettings markets.
In the new RICS Residential Market Survey, an extra 10 per cent more respondents expected a rise in interest from new buyers in June, suggesting positive momentum for the UK housing market. RICS revealed that this was the first recorded rise in new buyer enquiries at a national level since November 2016.
RICS also pointed to their new instructions indicator, which records the number of properties added to an estate agent’s list of sales. This indicator moved into positive territory for the first time in a year, according to the new survey.
House prices remain stable
The new RICS survey noted that house price inflation remained broadly stable across the UK as a whole, but added that a balance of 25 per cent more respondents expected continued house price inflation in the coming 12-month period.
New-build premiums were noted by RICS, with their survey estimating that 52 per cent of respondents believed newly-built properties carried a price premium in the region of 5 per cent at a bare minimum and 10 per cent at most.
The survey also revealed that rental property supply had fallen in June, meaning that the number of new rental properties coming onto the market declined for the twentieth consecutive month in a row. As a result of this weak supply, combined with strong rental demand, RICS added that rent expectations were likely to rise.
RICS claimed that: “Average five-year projections imply rental values are expected to rise by 3.6 per cent per annum, surpassing house prices, which are seen rising 2.7 per cent on the same basis.”
A more settled market
Simon Rubinsohn, chief economist at RICS, claimed the new survey suggested a somewhat settled housing market, with a number of factors at play. He said: “The latest data provides further evidence of the sales market settling down, but I don’t get the impression from the insight by contributors that this is fuelling hope of a significantly more active market going forward.”
He explained, saying that factors which served as a challenge to the UK housing market remained unresolved.
He concluded: “Meanwhile, feedback on the lettings market continues to highlight the impact of the policy changes announced in recent years. Build to Rent should, in time, help take up some of the slack in parts of the country, but RICS indicators, capturing rent expectations, suggests there is no expectation this will be the case anytime soon.”