The outlook for the housing market remains subdued, with new buyer inquiries falling for the eleventh month in a row, according to the Royal Institute of Chartered Surveyors.
Its latest housing market data showed that the average number of properties on estate agents’ books hit new lows in February.
The RICS new buyer inquiry figures – which has been proved to be a good lead indicator of Bank of England mortgage approvals – fell to a net balance reading of minus 16 per cent. This is the difference between surveyors recording a fall in mortgage approvals rather than a rise.
There was a similar negative picture on the data recorded by RICS on newly agreed sales, which leads official transaction data. These also showed a negative figure in February, at minus 17 per cent.
In addition, RICS latest house price index fell to zero in February, down from a figure of 7 the month before. This was a bigger drop than expected and matched November’s reading, the lowest figure recorded since March 2013.
RICS says that these figures would appear to suggest that the government’s attempt to breathe fresh life into the market through eliminating the stamp duty charge for most first-time buyers in the Budget is not having a significant impact on overall demand.
In its report RICS said: “Alongside ongoing concerns about affordability in some areas of the country, part of the problem may lie in the lack of choice of property to purchase with the RICS New Instruction indicator falling once again, and by the biggest margin on a seasonally adjusted basis.” This is down 24 per cent in net balance terms since July 2016.
This has pushed the average inventory per branch on the books of agents who responded to the survey to a new record low of just 42.
In another sign of the increasingly challenging market, the average time for a sale to complete has continued to edge upwards. When RICS started recording this data (at the beginning of 2017) it typically took sixteen and a half weeks for the whole process to complete. It is now around eighteen and a half weeks.
These results continued to show significant regional variation across the country. Despite new buyer inquiries falling nationally, they did increase in Scotland, Northern Ireland, Yorkshire & Humberside and the north of England.
The biggest falls in new buyer inquiries were in the East Midlands, London and the South East, with the trend in most other regions broadly flat.
Similarly, surveyors responding to this survey had more positive expectations of future price rises in Wales, the North West, Northern Ireland and the East Midlands.
However the outlook on house prices was more negative in London, East Anglia, the South East and the North.
Kensington Mortgage sales and marketing director Craig McKinlay says: “Today’s findings reinforce a pattern we have seen before. With limited new instructions and supply coming onto market this is creating a bottleneck for those looking to step on, move up or downsize.”
He adds: “Although the Government has reaffirmed housing is high on its agenda, we need to see less discussion, less pointing the finger and more action.”