The UK housing
market has started the new year off in a similar fashion to the closing stages
of 2017, according to the January 2018 RICS UK Residential Market Survey.
In January, new
buyer enquiries, instructions and sales all continued to drift lower, while the
three month expectations for agreed sales points to a flat picture in the
coming months.
Having said that,
there is more optimism regarding the twelve month sales projections which are
now modestly positive in virtually all parts of the country, this optimism is
also visible in the accompanying comments from contributors to the
survey.
For a tenth month in
succession nationally in January, new buyer enquiries across the UK declined
with 11% more respondents reporting a fall rather than rise. Similarly, newly
agreed sales also slipped, extending the run of negative readings back to last
February. Going forward, a relatively stable sales trend is expected to emerge
in the near term, while respondents envisage sales picking-up over the next
twelve months as a whole.
There is, however,
no sign of an upturn in the flow of properties coming to the market in the UK,
and with 17% more respondents seeing a further decline in new instructions, the
January figure was the weakest since May 2017. Significantly, the pipeline for
instructions does also not appear to be improving, with 10% more respondents
across the UK as a whole noting the number of valuations undertaken was below
the figure for the equivalent period last year.
Moving to prices,
the national price balance remained unchanged from December with 8% more
respondents seeing a rise in prices nationally. This is consistent with further
modest price growth.
Regional price
trends, however, do continue to differ significantly. The London figure remains
in negative territory, and falling prices are also reported across the South
East, East Anglia and the North East (albeit all to a much lesser extent than
London). On the opposite end of the scale, the North West of England, Northern
Ireland and Wales posted the strongest price growth (in net balance terms).
Looking at price
expectations, these over the next three months nationally remain flat pointing
to the pace of price growth potentially easing in some parts of the UK.
However, looking twelve months ahead, price expectations are positive in eleven
of the twelve regions/countries covered by the survey. London was again the
exception, although the net balance has turned less negative, moving from -41%
to -21% (the least negative in six months).
In the lettings
market, tenant demand edged up in the three months to January, but landlord
instructions fell back slightly once more. This imbalance prompted positive
rental growth expectations for the near term.
The regional renting
picture remains as varied as the buying market. Rent expectations are still
negative in London, although to a lesser extent than any other quarter since
2016. Meanwhile, rents are anticipated to see little change in the South East
on the same basis. Elsewhere they are generally expected to move higher.
"The latest
RICS results point to housing transactions at a headline remaining pretty
subdued over the coming months despite some more positive comments from
contributors to the survey," said Simon Rubinsohn, RICS' chief economist.
"Lack of
inventory on agents’ books continues to provide a major challenge with the
number of valuations being undertaken not suggestive of a pick-up in new supply
anytime soon.
"Divergent regional trends remain very much to the fore with the market in
many parts of the country still actually behaving in a solid if unspectacular
way despite the downbeat headlines. Affordability issues continue to play a key
role in explaining this pattern with those areas where house price earnings are
most stretched seeing the softest markets."
