RICS – Rising demand placing upward pressure on prices
Housing market activity continued to pick up in February, with new buyer enquiries, sales and fresh listings all increasing over the month, according to the latest RICS survey data.
The results extend a run of positive readings going back to December. That said, although near term sales expectations remain positive, optimism has moderated somewhat, with anecdotal evidence suggesting concerns over the economic impact of the coronavirus are weighing on the outlook to some extent.
Despite this, new buyer demand has increased for the third consecutive month, with growth being cited across virtually all parts of the UK.
On the back of these stronger demand trends, sales continue to rise, with the monthly pickup in transactions was most widespread in Northern Ireland, East Anglia and London. Meanwhile, at the other end of the spectrum, Scotland was the only area where respondents reported a decline in sales.
Going forward, near term sales expectations remained in positive territory for a fifth month in succession. At the twelve-month horizon, 61% of survey participants expect sales levels to improve over the year ahead.
New instructions coming onto the market for sale also edged higher for the third month in a row, with the West Midlands and the South East seeing the strongest rise in fresh listings since December.
Back at the national perspective, appraisals are reportedly running ahead of last year’s levels. Consequently, the pipeline for new instructions is seemingly improving more noticeably than at any other point since this series was introduced into the survey towards the end of 2017.
Furthermore, house prices are now rising across all parts of the UK according to contributors, with Yorkshire and the Humber, London and East Anglia exhibiting the strongest momentum in the February report.
Looking ahead, 22% of survey participants expect prices to rise further over the next three months (a slightly more moderate reading than 30% in January). At the twelve-month time frame, 72% of contributors anticipate prices will increase in the year to come, with expectations firmly positive in all parts of the UK.
Jeremy Leaf, former RICS residential chairman, said: “The usually reliable RICS survey suggests that house-price inflation, demand and new listings have been increasing for the past few months, which is good news, even though it is based largely on pre-virus responses.
“It confirms what many of our buyers and sellers are telling us – that the impact will be serious but short term. Our viewings are about 25 per cent lower than we might have expected at this time of year but sales are not being cancelled so far and we have even seen exchanges of contract immediately post-Budget.”
Source: Financial Reporter