The August Residential Market Survey from the Royal Institute of Chartered Surveyors (RICS) shows a market under pressure, the organisation says.
The monthly sentiment survey of chartered surveyors operating in the residential sales and lettings market suggests most parts of the UK are seeing a decline in the volume of new buyer enquiries, which RICS says indicates a continued slowdown in sales activity.
New buyer enquiries fell for the second consecutive month, with a net balance of –17%, compared with -7% in July. Agreed sales fell to a net balance of -24%, down from -17% last month, with respondents expecting sales to remain largely stagnant over the coming quarter.
With new vendor instructions at a net balance of -3% and market appraisals at -7%, the figures represent the first occasion since June 2024 when the measure has been below zero.
Forward looking sentiment points to the subdued backdrop remaining in place over the coming months, with the consensus among respondents being that the year ahead will be largely flat.
‘With buyer demand easing and agreed sales in decline, the housing market is clearly feeling the effects of ongoing uncertainty’, RICS head of market research and analysis Tarrant Parsons said:
“Concerns over the wider economic and fiscal outlook, combined with questions around the future path of interest rates amid stubbornly high inflation, are weighing on sentiment at this time.”
Neil Foster, from Hadrian Property Partners in Hexham, believes the dip in demand is due to more than a seasonal lull. He commented:
“Many selling agents are rolling out the annual excuse of the ‘holiday season’ for sluggish activity but there is a real sense that the market is cooling and unlikely to breath signs of recovery until after the budget. More pain for homeowners from the Chancellor could precipitate even weaker demand.”
Many respondents believe speculation over property taxation is having a negative impact on the market. Stan Shaw, a RICS registered valuer from Ham in Surrey, commented:
“Once again, fears over what may or may not be in the next Budget are causing market paralysis. General sentiment amongst buyers and potential vendors is one of hesitancy and caution.”
Ben Hudson from Hudson Moody in York enjoyed a busy summer, but agreed that the ‘negative media around tax changes at the budget is making buyers nervous’.
And James Brown from from Norman F Brown thinks the downturn will see out the season. He commented:
“Now that the Autumn Budget has been announced for late November and with media speculation about possible changes to stamp duty and capital gains, I can’t see the market picking up into the Autumn.”
