The UK housing
market is still on hold - pending election results - with the
November 2019 RICS Residential Market Survey continuing to show a cautious
approach from buyers and sellers.
Demand from
prospective buyers, new instructions to sell, and sales, all remain in negative
territory, as the latest set of results indicates that persistent economic and
political uncertainty is deterring both buyers and vendors, and anecdotal
commentary cites the General Election and Brexit as stifling activity.
New buyer enquiries
slipped for the third month in a row in November as 9% more respondents saw a
decline in enquiries (rather than a rise). This was seen both at a headline
level and across all UK regions.
Newly agreed sales
also saw a fall at the headline level, although at a slower pace with the
latest reading moving to -8% from -18%. New instructions to sell also continued
to dip at the national level and, in light of this, average stock levels on
estate agents' books remain close to record lows at approximately 41 properties
per branch.
There is change
expected, however, post the election result, with sales expectations over the
next three months looking more stable (net balance +11% from 5%), as well as
the twelve-month outlook seeing the most positive sentiment since February
2017, with +35% net balance. Looking at regions individually, a solid increase
in transactions over the next 12 months is expected across virtually all areas
covered by this survey.
Prices are also
expected to pick up over the next 12 months on a headline level, with 33% more
respondents in the November survey anticipating house prices will rise (rather
than fall) over the next twelve months. Significantly, prices are expected to
return to growth across all areas of the UK with Wales and Northern Ireland
leading the way.
Key findings:
- Buyer enquiries
and new instructions continue to fall
- Sales expectations
for the next three months get a little more positive
- Respondents expect
that house prices will return to growth over the next twelve months
Simon Rubinsohn,
Chief Economist at RICS, states that the new government must provide
reassurance regarding the economy and Brexit, in order to encourage a
well-functioning housing market
Looking at prices in
the current market, the headline price balance slipped to -12% in November
following three months of broadly flat readings. This is consistent with a
modest decline in house prices. However, the regional breakdown suggests that
this appears to mainly a result of negative price trends across London, South
East and East Anglia. Solid gains are still being reported across Northern
Ireland and Wales.
In the lettings
market, the latest numbers (which form part of the non-seasonally adjusted
monthly series) once again show a decline in rental stock coming on the market
- an ongoing theme over much of the last three years - against steady
tenant demand. On the back of this, rents are expected to rise modestly in the
coming three months.
"Confidence is
critical to a well-functioning housing market and whatever happens in the
general election, it is important that the new government provides reassurance
both over the stewardship of the economy and the ongoing challenges around
Brexit, which continues to be highlighted in a disproportionate number of
remarks made by respondents to the RICS survey," he conitnued.
"Significantly,
despite the inevitable near term concerns, the feedback regarding the medium
term view of the market remains surprisingly sanguine, with the twelve month
sales expectations indicator at its best level since the early part of 2017."
