The November RICS Residential Market Survey released 8th December shows a small increase in new buyer enquiries for the third consecutive month, with near term expectations pointing to a continued, albeit relatively modest, rise in activity over the months to come. For the second consecutive month, the strongest growth was reported in the West Midlands and North West of England. In London, Wales and the North East of England, slightly more surveyors reported a fall rather than a rise in prices.
Outlook for the residential market remains positive…for the moment
On the supply side of the market, conditions remained broadly unchanged relative to October with an increase in instructions in some parts offsetting falls elsewhere.
The increase in demand led to a further rise in agreed sales. While this is the highest reading since February, it is still indicative of a very moderate rise in activity. The combination of the tight supply conditions alongside growth in sales activity has led to a further erosion of available stock for sale, and indeed, respondents across most parts of the UK highlight the supply shortage as a very dominant feature of the market at present.
While the near term outlook for transaction levels remains positive, it has moderated slightly. However, at the twelve month horizon, respondents in all areas remain confident in the outlook.
The near term outlook for prices remains broadly similar to October with surveyors expecting an increase over the coming three months, and some growth expected across most parts of the UK. The outlook over the year to come is positive in all areas however contributors are less confident in the prospects for London prices relative to other areas over the year to come.
In the lettings market, tenant demand (non-seasonally adjusted) rose at a more moderate pace, as is usual around this time of year, although new landlord instructions fell slightly at the headline level. Tenant demand continues to outpace supply across most areas and rent expectations remain firmly in positive territory, with 17% more respondents forecasting further growth rather than a fall.