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Monday, 14 October 2019
DEMAND for lettings is continuing to rise against a backdrop of falling supply, according to the latest residential market survey from the Royal Institution of Chartered Surveyors.
With new instructions and buyer enquiries reported to be broadly flat, a decline in market activitiy is expected over the next three months.
A RICS spokesman said: “Brexit uncertainty is again highlighted as a significant factor causing hesitation amongst buyers and vendors. Nevertheless, a more stable trend in sales is envisaged at the 12-month horizon.
“Following a couple of months in which new buyer enquiries increased modestly, August saw a flatter trend in demand at the national level.
“Indeed, a net balance of just three per cent reported a rise over the month, with a reading so close to zero indicative of virtually no change.
“Meanwhile, on a UK-wide basis, the survey’s newly agreed sales series inched slightly further into negative territory in the latest results, with a net balance of minus eight per cent compared to minus six per cent previously.
“When disaggregated, most areas posted a flat or negative sales trend in August, with the East Midlands and South West regions displaying the weakest momentum over the survey period.
“At the other end of the scale, Wales and the North East of England appeared to buck the national trend, as respondents reported a solid increase in activity over the month.
“Looking ahead, the near term sales expectations net balance fell from minus four per cent to minus 23 per cent, representing the poorest return since February this year.
“Furthermore, sales expectations have weakened in almost all parts of the UK over the past two months. Beyond the next three months, respondents foresee activity stabilising at the 12-month time-frame.
“At the national level, a net balance of five per cent of survey participants expect sales to rise over the year ahead, although this is down from 12 per cent and 22 per cent in July and June respectively.
“Alongside this, new instructions to sell were more or less flat once again in August, marking the third consecutive report in which the volume of fresh listings coming on to the market has seen little change.
“The generally subdued trends in activity over the past month have ensured price pressures remain muted across the country as a whole.
“The headline RICS Price net balance came in at minus four per cent in August, suggesting house prices were largely unchanged. Even so, the latest reading is slightly higher than the minus nine per cent posted in July, signalling that some downward momentum has abated for now.
“At the regional level, respondents across London, the South East and East Anglia continue to report an outright decline in prices, while the North East also returned a negative reading this month.
“Conversely, according to respondents in Scotland, Northern Ireland and Wales, house price inflation remains firm in their localities.
“Regarding the near term outlook for prices, expectations are negative at the national level, with a net balance of minus 24 per cent of survey participants anticipating a decline over the coming three months — down from minus 13 per cent last time out.
“Nevertheless, at the 12-month time horizon, a net balance of 12 per cent of respondents project prices will increase, once again led by the strongest sentiment in Northern Ireland, Scotland and Wales.
“On the same basis, prices are still seen to be falling in London.
“In the lettings market, the August results show tenant demand increased for an eighth month in succession, as a net balance of 23 per cent of contributors cited a pickup.
“Set against this, landlord instructions remain in decline, an ongoing trend stretching all the way back to 2016.
“Given the consistent imbalance between rising demand and falling supply, rents are seen being squeezed higher over the next three months.
“In fact, near term rental expectations are now positive, to a greater or lesser degree, across all parts of the UK.”
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