New data has suggested the property market remains “muted” amidst downward trends in new buyer demand, sales, listings, and house prices.
The Royal Institute of Chartered Surveyors’ (RICS) January 2023 UK Residential Survey also reported that these trends are expected to continue in the near-term as the market adjusts to higher interest rates.
Looking at specific data, the latest net balance for new buyer enquiries slipped to -47%*, down from -40% last month, the ninth successive negative monthly reading of this metric. A negative or stagnant reading was also reported in all parts of the UK, indicative that the national picture is being seen on a regional level too.
Respondents also reported a fall in fresh listings, with a net balance of -14% of contributors reporting a decline in new instructions over January. However, looking ahead over the next year, the sales outlook looks somewhat more positive than previously: the net balance now reads -20% compared with -42% in December.
RICS also reported a negative trend regarding house prices with the January net balance sitting at -47% compared with 42% beforehand. This can, however, be contrasted with encouraging data from Halifax that suggested January brought “stability” to the market as the trend of house price falls came to a halt.
“Although some respondents to the January RICS survey have noted a little more interest in the housing market as the new year got underway, the overall tone of the feedback still remains subdued which is not altogether surprising given the jump in mortgage rates since the autumn,” said Simon Rubinsohn, Chief Economist, RICS:
“Prices, meanwhile, are now beginning to reflect the shift in balance between demand and supply.
However, it is questionable how much downside to pricing there is likely to be given that recent macro forecasts from the Bank of England and others are now envisaging a less harsh economic environment this year.”
*Net balance = Proportion of respondents reporting a rise in prices minus those reporting a fall (if 30% reported a rise and 5% reported a fall, the net balance will be 25%).
