The final quarter of 2024 will be positive with buyer demand and sales activity on the rise according to the latest sentiment survey from the Royal Institution of Chartered Surveyors (RICS).
The latest Residential Property Monitor for August 2024 shows a rise in the number of people looking to buy homes, with a net balance of +15 of respondents noticing an improvement in this survey indicator, up from +4 in July and the highest level seen since October 2021.
New sales are up (+6% in August, against -1% in July) and sales expectations in the near and medium term are both on an upward trend toward levels not seen since the market fervour in 2021. Sales volumes over the coming three months recorded a net balance of +37% and a net balance of +45% of respondents envisage sales activity strengthening over the next twelve months – with both indicators having been at zero in the latter part of 2023 and start of 2024.
The number of market appraisals undertaken by those surveyed is up on 12 months ago, leading to new a instructions sentiment net balance of +7% in August compared to +3% previously.
Despite recent reports of a potential market slowdown toward the end of 2024 in the mortgage lending figures published last week RICS say the uptick is in part due to the recent, albeit ‘modest softening’ of interest rates and chimes with the recent Halifax House Price Index.
In the week the government have introduced the Renter’s Rights Bill with commentators sharing their concerns it could constrict supply, tenant demand continues to remain positive, although the pace of growth has slowed compared to previous months. The net balance of +11 in August is lower than the +26 recorded in July, but still reflects steady interest from renters. On the other side, the supply of rental properties remains sluggish, with new landlord instructions falling again. The net balance for new rental listings dropped to -21, down from -9 last month; with the ongoing shortage expected to keep pushing rents higher. A net balance of +39 from survey respondents indicates rents will increase in the coming months.
Commenting on the latest survey, RICS Chief Economist, Simon Rubinsohn, said:
“The latest RICS survey captures an improvement in sentiment over the past month in the wake of the modest decline in mortgage rates with buyer interest improving, albeit from a relatively low base, and stock levels edging up. However, anecdotal remarks from respondents still demonstrate the need for realistic pricing to get deals done with uncertainty both around the scope for further interest rate cuts and the likely contents of the forthcoming Budget keeping the mood in check.
“Affordability remains an issue in the sales market even with somewhat cheaper finance now available but the picture appears even more acute in the lettings market where the amount of rental stock continues to diminish. Contributors continue to point to landlords looking to scale back their portfolios which will inevitably increase the imbalance that already exists in the market”.
