The UK housing
market ended 2018 on a weak note with uncertainty still biting, alongside
continuing lack of stock and affordability issues, according to the December
2018 UK Residential Market Survey.
Key activity
indicators continued to slip in December with sales volumes dwindling, although
beneath this national headline figure some areas of the UK saw a more positive
trend (East Anglia, Wales, the North East and Northern Ireland).
Key activity
indicators continued to slip in December with sales volumes dwindling, although
beneath this national headline figure some areas of the UK saw a more positive
trend (East Anglia, Wales, the North East and Northern Ireland).
Moving forward,
however, over the next three months sales expectations are now either flat or
negative across the UK. The headline net balance of -28% represents the poorest
reading since the series was formed in 1999. The twelve-month outlook is a
little more upbeat, suggesting that some of the near-term pessimism is linked
to the lack of clarity around what form of departure the UK might make from the
EU in March.
In terms of prices,
the headline indicator slipped slightly deeper into negative territory during
December, falling to -19% from -11% in November. This marks the fourth
consecutive negative reading. Nevertheless, the UK-wide measure is still
masking regional differences.
Looking ahead, the
twelve-month outlook for prices remains broadly flat. With the exception of
London and the South East, prices are anticipated to either rise or hold steady
across the other UK regions over 2019.
Domestic issues
related to lack of supply and affordability also continue to affect the market,
with stock levels and buyer interest declining further in December. In fact,
new buyer enquiries fell for a fifth month in succession, (net balance -17%
compared to -20% in November). This decline in demand from buyers matched the
deterioration in new instructions, which have now remained in negative
territory for the last six months and have declined in 19 of the previous 24
months.
Given this, it is
little surprise that stock levels on estate agents books remain close to record
lows, currently standing at an average of just 42 properties per branch.
Furthermore, supply
issues also remain evident in the lettings market, as landlord instructions
also declined once again, rounding off a year in which they have fallen in all
twelve months.
Simon Rubinsohn,
RICS Chief Economist, said: "It is hardly a surprise with ongoing
uncertainty about the path to Brexit dominating the news agenda, that even
allowing for the normal patterns around the Christmas holidays, buyer interest
in purchasing property in December was subdued. This is also very clearly
reflected in a worsening trend in near term sales expectations.
"Looking a
little further out, there is some comfort provided by the suggestion that
transactions nationally should stabilise as some of the fog lifts, but that
moment feels a way off for many respondents to the survey.
"Meanwhile it
is hard to see developers stepping up the supply pipeline in this environment.
Getting to the government's 300,000 building target was never going to be easy
but pushing up to anywhere near this figure will require significantly greater
input from other delivery channels including local authorities taking advantage
of their new-found freedom."
