The latest residential market survey from RICS shows that amid a weakening residential market, the time it takes to complete a sale from listing is 19 weeks – the longest duration posted since February 2017.
The report also details a slowing down of demand as well as sales, with new buyer enquiries falling to -21 per cent as compared to -15 per cent in October, meaning that buyers have grown more cautious, and the net balance of new instructions falling to -24 per cent – the fastest decline of this factor in 28 months. This leaves average stock levels at 42.1.
On a national level there was a small decline in newly agreed sales, from -10 per cent in October to -15 per cent in November, and headline sales expectations dropped from -6 per cent to -23 per cent, translating to a negative sentiment over a three-month horizon.
Meanwhile, the headline price net balance was nearly flat, dropping to -11 per cent as compared to -10 per cent in October. On a regional level, London, the South East and East Anglia posted negative price trends, whereas Northern Ireland, Scotland, the Midlands and the North West saw growth.
Regarding price expectations over the next three months, survey respondents with -25 per cent, down from -17 per cent in October.
Supply looks to be restricted in the lettings market too, with new landlord instructions stuck at -14 per cent, which RICS believes will drive “modest” rental growth in the short- and medium-term, and by 3.1 per cent per year over the next five years. It anticipates price growth at 2.3 per cent over the same time frame.
RICS chief economist Simon Rubinsohn says: “It is evident from the feedback to the latest RICS survey that the ongoing uncertainties surrounding how the Brexit process plays out is taking its toll on the housing market. Indeed, I can’t recall a previous survey when a single issue has been highlighted by quite so many contributors.
“Caution is visible among both buyers and vendors and where deals are being done, they are taking longer to get over the line. Significantly the forward-looking indicators reflect the suspicion that the political machinations are unlikely to be resolved any time soon. The bigger risk is that this now spills over into development plans making it even harder to secure the uplift in the building pipeline to address the housing crisis.”
RICS head of policy Hew Edgar adds: “RICS shares the resounding sentiment of frustration from our professionals operating in the UK’s residential sector; and we are not surprised by this month’s outcome.
“Prior to the referendum, our research indicated that Brexit would only impact the higher end of the residential market, as the lower and middle market areas are domestically driven. Now, however, it appears that those looking to buy and sell homes across the price spectrum, as well as those looking to invest in the UK’s residential sector, are putting off decisions until there is more certainty.”