Homebuyers are returning to the housing market as post EU referendum fears continue to calm, the latest RICS UK Residential Market Survey has found.
House prices were at the forefront of the EU debate in the run-up to the referendum with the now former chancellor George Osborne claiming that the value of homes in the UK could fall by up to 18%, or more than £50,000, within two years of the Brexit vote.
But RICS’ latest findings suggest that house prices could actually rise in the coming months on the back of a lack of housing stock if the level of new buyer enquiries, which rose for the first time in seven months in September, continues.
Although the pick-up in buyer enquiries was only modest, it does suggest that even during times of economic and political uncertainty, the UK housing market remains strong, supported by a robust labour market and solid employment growth, not to mention historically low borrowing rates which could drop further if the Bank of England opts to cut interest rates in November.
While homebuyer demand edged higher, the volume of new instructions received by agents fell again, adding to the supply-demand imbalance in the market.
Simon Rubinsohn, RICS chief economist, said: “The market does now appear to be settling down following the significant headwinds encountered through the spring and summer.
“Buyers do appear to be returning, albeit relatively slowly, but the big issue that continues to be highlighted by respondents is the lack of fresh stock on the market.
“Although this is not a new story, it is a significant one having ramifications for both prices and the level of turnover.”
The average level of stock on estate agents’ books remains close to historic lows at just over 45 properties.
Home prices are predicted to increase over the next three months, with 14% more respondents expecting to see a price rise.
Richard Sexton, director of e.surv, said: “These sentiment results show confidence within the housing market has remained generally resilient. The recent figures from CML revealing increases in both remortgage levels and lending, particularly to first-time buyers, are a clear indication that the lending market remains active.
“However, the imbalance between supply and demand continues to put an upward pressure on house prices. Although more first-time buyers are entering the market, until more new homes are built properties will remain unaffordable to many. The government and the industry need to work together to address this issue if we are to see this confidence remain over the longer term.”