A fifth successive month of increased buyer demand will see the property market enter 2025 in rude but there is a warning from the Royal Institution of Chartered Surveyors a reduction in market appraisals could see a slowdown in the opening months of next year.
The data is taken from RICS monthly UK Residential Survey, for November 2024, with most markers indicating broadly positive sentiment around the property sector despite lenders increasing mortgage rates in recent months.
New buyer enquiries maintained positive momentum, recording a net balance of +12%; largely unchanged from the previous month and highlighting a modest but sustained recovery in buyer demand.
In line with much of the last 12 month, agreed sales volumes remained broadly flat, with a net balance of +1% compared to +8% in October. However, respondents remain positive sales are coming with a a net balance of 19% of respondents anticipating an increase in sales activity over the next three months, although this figure is more moderate than both September (22%) and October’s (34%) figures.
New instructions have risen for the fifth month in a row but the Institution warns market appraisals in November were on par with levels seen a year ago, could signal a potential slowdown in the pipeline of new listings as we move into 2025.
This latest survey echoes much of the sentiment in last month’s RICS UK Residential Survey. Just this week property portal Rightmove revealed its predictions for 2025 which included Bank of England base rate cuts which could drive mortgage rates down to 4%; and an uplift in transaction volumes to 1.15m. Both RICS and Rightmove share the view house prices will increase over the next 12 months with sentiment up significantly on October (+24% against +16%) ‘cementing the upward trajectory of house price growth observed since the summer.’
Commenting on the latest survey RICS Senior Economist, Tarrant Parsons, said:
“Although the latest survey results continue to signal a steady improvement in buyer demand across the residential market, the broader macro environment is likely to pose additional headwinds moving forward. Most significantly, the recent rise in mortgage interest rates may curtail the recovery in market activity before long, and this is reflected in the slightly less optimistic sales expectations data coming through this month.
“Moreover, measures of consumer and business confidence across the economy have deteriorated of late and, if sustained, this could begin to feed through into housing market conditions in the months ahead”.
