July RICS survey shows static buyer demand and agreed sales
Buyer demand and agreed sales remained static in July, with little sign of a meaningful recovery, according to the latest Royal Institution of Chartered Surveyors (RICS) UK Residential Market Survey.
Its figures show that new buyer enquiries recorded a net balance of -28% in July, unchanged from June. However, this has improved from a low of -41% in March.
Agreed sales were also unchanged, registering a net balance of -30%, although this is also an improvement on the -37% recorded in April.
However, although the current market is subdued, RICS said that positivity for the future seemed to be returning. Near-term sales expectations improved for the fourth successive survey to a net balance of -14%, whilst expectations over the longer twelve-month period moved to the most positive reading since February, at +3%.
Meanwhile, the flow of properties coming onto the market stabilised in July with new vendor instructions recording a net balance of -4%, compared with -23% in June. Market appraisals returned a balance of +19% compared to the same period last year.
House price balances remain negative
The national house price balance came in at -30%, marginally improving from -32% in June and -35% in April, indicating that price falls are more prevalent than rises.
Regionally, respondents in London, the South East and South West continue to report more negative price balances than the national average, compared to those in Northern Ireland who continue to report rising prices. Following a sustained period of stronger growth, price momentum in Scotland appears to be flattening.
Expectations for prices over the coming three months remain weak, with a net balance of -31%, but over a twelve-month outlook sentiment improves to +4%. However, in London year-ahead price expectations have fallen to -23% in July, from -10% previously.
Rental demand flat but confidence in rent rises
In the rental market, tenant demand was broadly flat in the three months to July, with a net balance of -1%, down from +12% previously. However, landlord instructions remained firmly negative at -27%.
Landlords are confident in rental levels, with a net balance of +28% expecting rents to rise over the next three months, compared with +25% previously.
RICS chief economist, Simon Rubinsohn, said: “The housing market remains subdued, and while that is not usual over the summer months, it is clear from the RICS seasonally adjusted data that the combination of geopolitics, the domestic political climate and the cost of mortgage finance are continuing to weigh on sentiment.
“Meanwhile, feedback from respondents to the RICS survey is continuing to draw attention to the impact of the latest round of regulation on the rental market, with the key indicator of new instructions pointing to a further drop in supply.”
