RICS – Housing market sees post-election boost
Outlook for the housing market has strengthened since the election result, with enquiries rising and sales expectations improving noticeably, according to the latest RICS survey.
RICS says a number of key activity metrics have moved into positive territory for the first time in several months and a pick-up in house price inflation is expected in the coming months.
Its data shows that the majority of UK regions saw an increase in enquiries over the month, with respondents in Wales and the North East in particular reporting solid growth. At the same time, enquiries also rose in London and the South East, marking a noticeable turnaround following negative readings in the previous month.
Agreed sales also edged up at the national level, the first positive reading since May 2019. London and East Anglia delivered amongst the strongest improvements in sentiment, although sales reportedly weakened in Northern Ireland and Scotland during December.
Looking ahead, near term sales expectations strengthened smartly for a third successive month, with virtually all UK regions displaying a positive assessment on the outlook.
Confidence in residential sales prospects over the next twelve months saw an even greater improvement, with 66% of survey participants envisaging sales to rise in the year ahead, up from 35% in the previous month. The strongest net balances were returned in Wales and the South West, although RICS says all regions “now exhibit relatively robust readings”.
In keeping with the brighter trends in demand and sales activity, new instructions being listed on the market also picked-up slightly at the national level. That said, outside of London and the South East, new sales instructions were more or less flat.
House prices show a broadly flat national trend for the time being. The South East, London and East Anglia all continue to see house prices soften for now, in contrast to Northern Ireland and Scotland where prices are still rising at a firm pace.
Going forward however, near term price expectations were higher in all parts of the UK and now point to a noticeable shift across previously weakening areas such as London and the South East.
Jeremy Leaf, former RICS residential chairman, commented: “While these are only one month’s figures so it is important not to get carried away, they do reflect quite a big turnaround from the rather negative noises we have been hearing from RICS for most of the last year. It also confirms what we are seeing on the ground – that the election and prospect of some additional clarity over Brexit is improving confidence and helping to release some of the inevitable pent-up demand.
“We don’t expect prices to increase sharply because affordability remains stretched, particularly in most of London. But certainly we have seen much more of the ‘why not’ stance rather than the ‘why’ attitude we were encountering just a few months ago.
“Looking ahead, the momentum is unlikely to be sustained until additional clarification of our trading relationship with the EU becomes apparent and may yet add a little more uncertainty for some buyers and sellers.”
Source: Financial Reporter