March market remains subdued as new buyer enquiries and agreed sales slip

March saw new buyers enquiries and agreed sales continue to decline nationally, with the price indicator pushed down by the South East and London.

The March 2018 RICS Residential Market Survey illustrated a lack of momentum once more, with prospective outlooks suggesting little sign of the market picking up in the near term. Given the variation at a regional level, however, the survey indicates that the subdued momentum can in part be attributed to London and the South East.

Between February and March, the headline price balance stayed relatively flat, once again recorded at 0. Correspondent with the almost unchanged UK house prices, the reading represents the joint lowest return for this particular indicator since February 2013. With a net balance of -47% and prices declining even more, London showed the lowest reading, with other areas such as East Anglia, the North East and the South East giving negative readings too, all be them more modest. Where the rest of the UK is concerned, however, prices remain on the upward trajectory, with the most significant rises in Wales, the East Midlands and Northern Ireland.

The near term price outlook, on a national level, remains relatively flat; predictions for the upcoming three months stay between a net balance of -5% and 5%. On a longer term basis, the outlook seems more positive, with a net balance of 47%  of respondents forecasting the prices will see an uplift during the next 12 months.

The North West, Wales and Scotland are the most positive about the upcoming year, whilst London continues to be the only place where respondents anticipate a decline in prices over this period.

Where demand is concerned, the twelfth consecutive monthly fall in new buyer enquiries casts a subdued outlook. Observing each region individually, just two of the 12 that the survey covers witnessed a rise in new buyer demand during March.

This downward pressure on has somewhat been attributed to the lack of new instructions, with the volume of new property listing also slowing during the month. This is the seventh month in a row that this particular reading has been in negative territory. In turn, the average levels of stock for estate agents is just shy of the record low.

Attributed to both the lack of supply and demand, the falling sales in March continued the downward trend for this measure, marking the thirteenth consecutive month which has seen a drop. Further, a flat reading or a decline in sales was observed in almost all parts of the UK.

On a near term basis, the forecast remains subdued, whilst the longer term outlook seems more positive, at a net balance of 17% of respondents predicting an uplift in sales. It is worth noting that this is a significant fall since last month’s report, where 34% of contributors forecasted a rise.

March’s report also included an additional question, which asked respondents about the Help to Buy Scheme, and whether it was acting as a barrier for second steppers as the scheme provides a draw to new build homes. The results indicated that views on this were very mixed; though 25% felt that the scheme is making it more difficult for second steppers to move, 26% believed that it was not having this effect whatsoever. For the remaining proportion, no opinion was expressed toward either response.

The full report can be accessed here.