Analysis from Rightmove and the Royal Institute of Chartered Surveyors (RICS) suggests the housing market is heading towards recovery. Real-time analysis from Rightmove revealed strong buyer demand during the first week in September, with the latest report from RICS also finding signs of stabilisation.
However, RICS warned that despite the apparent stability, “headwinds over the shorter term remain pronounced”.
Rightmove’s more positive analysis revealed buyer demand increased by 5% during the opening week of September, significantly outpacing the average increase of 0.4% seen over the same period during the last five years.
The stronger than normal uplift indicates a sharper return to the market than is typically seen at the start of September, the property portal said.
While overall buyer demand remains below last year’s level, the stronger than usual start to September has helped narrow the gap. Buyer demand moved from 14% below last year’s level at the end of August to 9% below for the first week of September.
The improvement was seen across every region of Great Britain. London recorded the strongest increase in buyer demand during the first week of the month (+9%), followed by the South West (+8%). The West Midlands and North East both recorded increases of around 7%, while the East Midlands and South East each saw a 6% uplift.
Colleen Babcock, Rightmove’s property expert said: “While buyer demand remains below last year’s level, this year’s back-to-school bounce is a welcome sign after a summer that brought the usual holiday distractions alongside several spells of exceptionally hot weather.
“It’s encouraging to see buyers getting on with their moving plans and returning to the market as we head into the autumn season. However, it is still early in the month, we will be keeping an eye on this over the coming weeks.”
The monthly sentiment report from RICS also found some reasons to be cheerful, with buyer demand and agreed sales moving away from recent lows.
However, both indicators remained negative, whilst interest rate uncertainty continued to weigh on prospects of recovery.
The net balance for new buyer enquiries rose to -19%, its least negative reading since January and fifth consecutive improvement. Agreed sales recorded a net balance of -17%, the least negative result since February and an improvement from April’s low of -38%.
Expectations for sales over the next three months moved closer to neutral territory, with a net balance of -3%, raised from -13% in July. Looking 12 months ahead, a net balance of +6% of respondents anticipated higher sales volumes, compared with +3% previously, pointing to a modest improvement in confidence.
The flow of new sales listings was broadly unchanged, with the new instructions net balance at zero, compared with -2% in July. A market appraisals balance of -17% indicated weaker activity than a year earlier, suggesting limited scope for a near-term expansion in the listings pipeline.
Tarrant Parsons, RICS head of market research and analysis, said: “August’s results show a market that is gradually finding its footing, with key activity indicators having become progressively less negative over recent months. That said, any potential recovery remains fragile and faces two significant near-term tests.
“The Bank of England’s increasingly hawkish tone, on the back of renewed volatility in global energy markets, is a reminder that the borrowing cost outlook could yet deteriorate further. And with the October budget approaching, speculation over potential changes to property taxation is adding another source of caution for both buyers and sellers.”
