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Number of new sales drops again: RICS

The amount of newly agreed house sales fell for the ninth month in a row, according to the latest RICS UK residential market survey.

The April data adds that all headline figures remain in negative territory, and that due to “Brexit uncertainty” and a continued lack of housing supply, this is unlikely to change in the near term.

However, the outlook for near-term sales did improve slightly within its negative parameters, moving from a -22 per cent reading in March to -11 per cent in April.

Additionally, looking 12 months out, the industry appears to be more hopeful, with a headline net balance of 13 per cent of respondents expecting sales to rise by spring next year.

The national house price net balance stood at the same number as March: -23 per cent, with prices in London, the South East and the South West being the main drivers of this gloomy result.

Meanwhile, Northern Ireland and Scotland again recorded positive balances, with 47 per cent and 28 per cent of respondents dealing in these areas reporting price rises.

The data also shows that 66 per cent of respondents said that for properties marketed at £1m or over, sales prices came in at a discount, and for properties listed at £500,000 and under, 62 per cent of participants said that prices were “at least level”.

Looking at new instructions, with the latest net balance at -35 per cent, April 2019 was the poorest month in terms of this metric since June 2016.

For the lettings market, tenant demand continued to rise while landlord instructions fell, a trend evident since mid-2016, while respondents said that they expect rents to rise 2 per cent in the next 12 months and 3 per cent per year until 2024.

Mortgage Advice Bureau head of lending Brian Murphy says: “Interestingly, within the broader geographical differences, the performance of various sectors of the market are adding yet further nuances, as demand for homes up to £500,000 appears to be holding steady, whilst many of those in the upper bracket of £1m or above appear to be finding the market challenging.

“One explanation for this could be that first-time buyers and family movers have decided to push ahead with their plans for this year regardless of the current political climate, whilst the more discretionary-led buyers who would be purchasing luxury homes are potentially taking a more circumspect view, as is often the case for those who do not necessarily need to move but are keeping an eye out for ‘the right’ property.”

Kent Reliance sales director Adrian Moloney adds: “It is important to remember that Brexit is just one factor affecting activity in the market. We have a clear problem around the supply of houses, while demand continues to increase. The average house price is currently eight times the typical wage in the UK and in the last decade alone, house prices have risen by 45 per cent, while wages have risen half as quickly.

“This is leading to lower rates of home ownership amongst younger generations, not to mention frozen chains up and down the ladder. Evidently, more needs to be done to ensure we are meeting housing targets in order to truly boost activity and improve home ownership levels.”

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