Housing Market Unsurprisingly Subdued
The Royal Institution of Chartered Surveyors (RICS) has published its latest UK Residential Market Survey for September 2019. Unsurprisingly, given the current political turmoil and uncertainty, activity remains subdued. Buyer demand is falling, but so is supply. There is no suggestion from commentators that activity will increase over the next quarter, although sentiment over twelve months does appear to be more resilient.
Supply had stabilised but has now fallen with limited numbers of new properties being listed with agents. The Brexit impasse seems to be dissuading vendors from bringing their property to the market. Average stock at agents is near to a record low and the lack of appraisals for new sales suggest that this will not change in the near future.
Purchasers are more cautious, having been relatively optimistic in the previous quarter. However, house price inflation is largely unchanged and is flat on a national level. The average is affected by prices in London and the South East where prices are now falling. The North West has actually seen solid gains in house prices and expectations remain bullish.
Low interest rates and high levels of employment suggest that house prices will remain stable for the near future, notwithstanding the possibility of some correction in the South East.
The rental market continues to be characterised by short supply as landlords retreat, largely due to Government policy on compliance and tax. Both main parties have policies designed to undermine the Private Rented Sector (PRS), although Labour’s right to buy conversations are perhaps the most worrying aspect. Tenant demand has risen for the eighth month in a row whilst landlord instructions have continued to decline. Rental growth is expected to accelerate over the next five years. No doubt this will be caused by continued supply reduction whilst demand is broadly constant.
Graham Bowcock MRICS