Sales of new homes increased for a third consecutive
month across the United Kingdom, as has buyer demand and new instructions,
according to the February 2020 RICS UK Residential Market Survey.
The February 2020 UK Residential Market Survey revealed a net balance of
+20% of respondents saw an increase in new buyer enquiries over the month, the
third period of growth in a row. In addition, experts are forecasting a better
sales outlook for the rest of the year, with +61% of survey participants saying
they expect more homes to be sold as the year progresses.
New homes coming onto the sales market also nudged up for a third straight
month, with new instructions seeing a net balance increase of +15% in February
– with West Midlands and the South East seeing the biggest bump in new
properties coming onto the market.
Strong demand has also seen prices increase in February, with a net balance
of +29% of contributors reporting house price growth– up from +18% on the
previous month. While there was growth in all regions of the UK, London,
Yorkshire and the Humber and East Anglia all saw the strongest increase in
house prices. Furthermore, a net balance of +22% are expecting house prices to
continue to rise further over Spring.
However, concerns have been raised by property professionals about the
impact of coronavirus which although yet unknown, could adversely affect
viewings and the traditional spring house selling season.
Simon Rubinsohn, RICS Chief
Economist, said: “It is encouraging that the results of the
latest survey continue to show a positive trend both in terms of potential
buyer interest and new instructions to agents. Indeed, this is the first time
since 2014 that new supply to the market on the RICS indicator has increased
for three consecutive months.
“Inventory levels are still at historically low levels despite this but the
firmer trend in appraisals suggests that the picture could improve over the
coming months providing the coronavirus doesn’t become more of an inhibitor of
activity in the sector.
“For now at least, feedback around expectations are consistent with activity
levels continuing to strengthen albeit relatively modestly.”
Residential lettings also saw demand increasing from prospective tenants,
however the number of properties listed by landlords for rent fell again –
extending the decline again since it was first recorded in 2016. Rising demand
for homes to rent and falling supply will see rents increase by potentially 2%
- and up to 3% per annum by 2025 if this trend is maintained.
The increased buyer demand comes ahead of Chancellor Rishi Sunak’s budget –
with RICS calling on the Government to boost the property industry as the UK
transitions towards leaving the EU.
Commenting ahead of the budget, Hew
Edgar, Head of RICS UK Government Relations & City Strategy,
said: “With demand for new homes set to grow even further, there is much the
Government can do to help level-up the property market in the UK which is
transitioning outside of the EU – but it does require bold action up-front to
maintain the positive momentum.
“The ball is in the Chancellor’s court and his first budget is a great
opportunity to deliver the long-term confidence the property industry and
investors need – he can achieve this by reviewing stamp duty to encourage the
supply of more homes, ensuring its fit for the twenty first century, to
overhauling business rates and making existing buildings greener by
incentivising retrofitting.“
