The Royal Institution of Chartered Surveyors (RICS) UK Residential Survey for May reveals a subdued housing market, with buyer demand and agreed sales still struggling for momentum but near-term expectations looking more stable.
Although indicators on buyer demand remain negative for the fifth consecutive month, with a net balance of -26% of survey participants reporting a fall in new buyer enquiries, the latest figure is an improvement on the -32% seen in March and April.
Agreed sales showed little change, with -28% in May marking a fourth consecutive negative month. However, the sales outlook over the next three months has improved slightly, with sales expectations at -5% compared to -13% in April. Further ahead, 25% of respondents expected sales activity to pick up within 12 months – the most positive reading since February.
On the supply side, +7% of surveyors saw a rise in new listings, marking the eleventh consecutive month of growth and ‘indicative of a gentle rise in new listings’. Valuation activity also picked up, with +19% noting an increase in appraisals compared to a year ago and indicating a potentially more active summer market. ‘As such, it appears there remains a reasonably solid pipeline for new listings in the month ahead’, the report notes.
Simon Rubinsohn, RICS chief economist, said of May’s figures:
“RICS welcomes this week’s announcement of the government’s commitment to a longer-term affordable housing settlement. This should provide greater certainty and support more strategic delivery.
“The creation of a new housing finance vehicle via Homes England is also a potentially important step in boosting supply, particularly if it improves access to funding for smaller developers. Together, these measures could help address the UK’s chronic supply shortfall and support broader economic stability.
“Importantly, today’s announcements also build on the planning reforms announced earlier in the year, reported to be assessed as adding £6.8 billion to the economy. These new policies highlight the wider economic gains that could flow from an overall better functioning housing market.”
RICS senior economist Tarrant Parsons added:
“Sentiment across the UK residential property market remains somewhat subdued, with ongoing uncertainty around global trade policies and the dampening effect of transactions being brought forward ahead of the stamp duty changes at the end of March continuing to weigh on buyer activity.
“However, near-term sales expectations are showing signs of stabilisation, suggesting that while muted conditions may persist in the short term, a further deterioration appears unlikely. Looking ahead, the outlook is more optimistic, with respondents anticipating a gradual recovery in sales activity over the next twelve months.
“That said, the pace and extent of any improvement will partly depend on the Bank of England’s ability to continue cutting interest rates.”
The RICS Residential Market Survey is a monthly sentiment survey of chartered surveyors who operate in the residential sales and lettings markets. This survey sample covers 486 branches coming from 230 responses.
