RICS – Housing market steadies in May
The property market showed signs of stabilising in May as new buyer enquiries held steady and other measures improved, according to the Royal Institution of Chartered Surveyors.
Its latest findings show that the downward movements in the number of sales agreed, new instructions and prices paid that its members have reported in recent months seem to be slowing.
While all of these measures continued to fall, the decline was less than in previous months, which RICS says appears to follow the decision to extend the deadline for withdrawal from the EU till the end of October.
But the surveying body does not believe that this “slightly less negative sentiment” in the market is likely to result in an increase in transactions in the near future.
RICS says that lack of homes coming onto the market is still an issue with stock on agents’ books hitting a new low.
Chief economist Simon Rubinsohn says: “Some comfort can be drawn from the results of the latest RICS survey as it suggests that the housing market in aggregate may be steadying.
“However, much of the anecdotal insight provided by respondents is still quite cautious, reflecting concerns about both the underlying political and economic climate.
He adds: “Another significant point made by respondents is that there continues to be considerable emphasis on the need for realistic pricing on the part of vendors, which while not a new story, is indicative of the ongoing challenges.
“Meanwhile, the lettings numbers are a source for some concern with rental expectations beginning to accelerate.
“It remains to be seen whether the pick-up indicated in our data materialises but the deterioration in the net return for landlords certainly provides a reason why, as it is a possible outcome of recent changes in the tax treatment of buy-to-let investments.”
Mortgage Advice Bureau head of lending Brian Murphy says: “This months’ report is slightly more positive than those from RICS of late and suggests that the tide may have turned in terms of the previously negative trend around buyer enquiries leading to the market remaining broadly steady in May.
“The suggestion is that those buyers who have up until now been waiting for a Brexit denouement have, understandably, decided that they are no longer able to put their property plans on hold and have therefore opted to purchase regardless.
“Whilst today’s report might spark a degree of excitement in some quarters of the industry, we also know that consumer sentiment can quickly change so until such times as we have seen a consistent trendline it would not be wise to suggest that this is the pivotal turning point for the market this year.
“That said, it is possible to also suggest that once a new Prime Minster is installed in Downing Street and more clarity is achieved around Brexit, the longer term forecast from RICS of a modest overall upturn in values may well turn out to be the case.”
Source: Mortgage Strategy