Fears over the economy and the availability of mortgage finance continued to depress housing activity in May, according to the latest Royal Institution of Chartered Surveyors UK Housing Market Survey.
RICS says the hoped-for spring bounce in the housing market failed to occur in May, with newly-agreed sales down from April’s level.
Only 5% more surveyors reported sales rose rather than fell in May and the average number of completed sales per surveyor decreased by 3.4% in the three months to May, dropping to 14.7, its lowest level since January.
Meanwhile, the average number of stocks per surveyor increased by 8.1% from 66 to 71.3 in May, indicating that more properties came to market and many stayed on surveyors’ books for longer.
Given the rise in stock levels and fewer sales levels during May, the sales-to-stock ratio – an indicator of the balance between demand and supply – fell to 20.6%, well below the long-run average of 33.5%, says RICS.
There was also little sign of a renewed appetite to view property, with new buyer enquiries down 2% in the month and many surveyors blaming the bank holidays for the flattening of demand.
Meanwhile, new vendor instructions continued to rise, but the pace of increase slowed slightly during May.
The survey also reveals 28% more surveyors reported house price falls rather than increases, the lowest reading since the beginning of the year.
Regional variation between London and the rest of the UK continued in May, with the capital the only region in England where more respondents saw rising rather than falling prices.
Looking ahead, surveyors’ expectations for future sales edged down, although they remain in positive territory at +9%.
Price expectations, which are already negative, fell more sharply with 27% more respondents expecting prices to fall rather than rise over the next three months.
Ian Perry, a housing spokesman at RICS, says: “Buyer interest in purchasing property remains flat across much of the country and there is little sign of this changing any time soon.
“Uncertainty over the economic outlook remains as important as the availability of mortgage finance in depressing demand.”
He adds that demand for rented accommodation is continuing to grow and with little supply coming onto the lettings market, the cost of renting will continue to increase.