After significant declines in the opening half of 2019, buyer enquires, and seller instructions increased in June.
According to the most recent RICS Market Survey for June, respondents posted a positive number of buyer enquiries for the first time since November 2016.
+10% of respondents witnessed a resurgence of buyer activity in the sector last month. This represents over a 30% swing in a more optimistic direction when compared with May’s survey.
New instructions entering the market also moved into positive figures for the first time in over a year.
Respondents also found that transaction volumes and newly agreed sales edged up to +2% in June. This is the first positive result in ten months. Sales expectations for the next three months are also expected to remain stable.
Moving forward, on a twelve-month basis, the market is suspected to remain comfortably positive. This is reflected in the survey’s sentiment regarding house prices which has increased to -1% from -9% in May, suggesting a flattish market beginning to improve.
Whilst the market for owner occupiers is beginning to look more optimistic, the same cannot be said for sections of the UK privately renting property.
Available buy-to-let property stock is continuing to shrink despite the improvements to the sales sector. Privately rented stock reduced for the twentieth consecutive month as legislative changes and increased tax obligations deter investors.
Average five-year projections suggest that this stock pressure will inflate the average UK rent by 3.6% per annum. This will significantly surpass house prices which are suspected to rise by 2.7% per year.
People investing in new builds will need to consider the new-build premium they pay for their home. 52% of respondents believe that the premium is currently somewhere between 5% and 10%.
Simon Rubinsohn, Chief Economist, RICS, said:
“The latest data provides further evidence of the sales market settling down, but I don’t get the impression from the insight provided by contributors that this is fuelling hope of a significantly more active market going forward. Many of the factors that have provided a challenge during the first half of the year remain unresolved.
“Feedback on the lettings market continues to highlight the impact of the policy changes announced in recent years. Build to Rent should in time help take up some of the slack in parts of the country but the RICS indicators capturing rent expectations suggests there is no expectation this will be the case anytime soon.”
Has the conveyancing sector noticed an improvement to the residential sector?
