Surveyors are readying themselves for the latest economic measures
to impact the UK housing market, as forward-looking metrics soften, but current
activity is still buoyant and house prices are continuing to rise, this
according to the latest RICS Residential Market Survey.
The April survey shows that would-be buyers are still on the hunt
for a new home, whilst stock levels and new listings remain scarce. This means
that house prices continue to be pushed higher across all parts of the UK.
This month +10% of respondents reported a rise in new buyers’
enquiries, the eighth successive month in which the survey has returned a
positive net balance. However, looking at the number of new properties being
listed for sale, respondents have once again reported a subdued trend in
listings, -1% of respondents said that new listings were falling instead of
rising, albeit this projects a more or less steady picture during the month.
Elsewhere agreed sales were flat having risen in each past two
months, returning a net balance of -2% in April.
Due to the imbalance between demand and supply, it’s unsurprising
that stock levels remain extremely low (38 per agency). Also, the number of
appraisals being undertaken has seen little change compared with the same
period twelve months ago, which does not seem to bode well for the flow of
supply coming onto the second-hand market. The supply vs demand difference also
means that house prices have once again risen across all parts of the UK. This
month, +80% of respondents reported an increase in house prices, up from +74%
in March.
Looking ahead, contributors are anecdotally preparing themselves
for some market adjustments given the recent rate rise and the pressure on
household budgets. That said, near-term sales expectations remain positive, as
a net balance of +12% of respondents anticipate a rise in sales over the next
three months. Looking to the year ahead, the net balance has eased for the
fourth consecutive report and now -4% expect sales to fall, however, this is
signalling a flat trend on the whole.
When looking to the future of house prices, contributors expect
prices to continue to rise, albeit to a lesser degree than in previous reports.
Looking forward to the next year, +62% anticipate prices to rise, but this is
down from +78% in the February survey.
Looking at the lettings market, (seasonally adjusted quarterly
data) there is no let up on the lack of new listings coming to the market as
-7% reported another fall in new properties available to rent. To note, this is
less negative than the 12-month average of -17%. Demand continues to also
increase as over half (+52%) of respondents saw an increase in enquiries. The
long-standing imbalance between supply and demand means that rents are once
again expected to rise. Indeed, significantly, +63% of respondents expect them
to rise in the coming three months and this is a record high for this metric
(records began in 1999)
RICS Economist, Tarrant
Parsons, commented:
“Despite growing macro headwinds in the form of cost-of-living pressures and
higher interest rates, the UK residential market continues to see modestly
positive trends in new buyer enquiries. For the time being at least, even
though there is a lot of caution about the future economic landscape, it seems
that limited supply available on the market, coupled with steady demand growth,
are still the overriding drivers of house prices. As such, there is little
evidence at this stage of house price inflation losing much momentum, while
expectations for the coming twelve months have only moderated slightly from
recent highs.”
