May RICS Report points to supply stability whilst activity remains flat

May saw buyer demand slip whilst new instructions edged into positive territory for the first time since 2016.

The results of the May 2018 RICS Residential Survey indicate a slight shift towards supply stability, with new instructions moving out of negative territory. Despite the movement towards greater market steadiness, this was not mirrored in general market sentiment, nor in the near term, with figures suggesting that no serious growth will be made.

May saw the headline RICS price balance recorded at -3%, signifying no change in house prices after the slight fall recorded last month. It is, however, important to note the regional variations where price balance is concerned; whilst London and the South East – to a lesser extent – showed more negative sentiment and a reflective drop in prices, areas including the Midlands, the North West and Wales saw house prices continue to grow.

On a near term UK-wide basis, price expectations suggest a slight decline, with the net balance recorded at -9%. However, this figure is largely due to downward pressure from the south of England. Looking more widely, the other areas of the UK are expected to see prices rise to differing extents. Currently, London is the only area where prices are anticipated to fall on a long term basis.

Where supply is concerned, May’s figures suggest greater stability, with new instructions moving out of negative territory for the first time in 27 months. In the capital, May represents the third month in a row which has seen new instructions remain positive. For the remainder of the UK, the 5% net balance remains with the reasonably unchanged trend for new instructions.

On estate agent books, average stock levels remain relatively stable at 42.5; whilst this is close to the lows observed over the past few months, the marginal uplift suggests that pressure on stock levels may be easing.

Looking to demand, seeing a modest fall was new buyer enquiries, although 50% of the twelve regions observed a rise during May.

Remaining steady for the most part was agreed sales levels, with May’s reading of -2% being the least negative reading in 14 months. On a regional basis, however, just four regions observed sales trends grow, whilst levels across the remainder of the UK stayed negative or unchanged.

Where outlook was concerned, respondents anticipate minimal changes in the market in the near term, whilst the longer term forecast painted a slightly more positive picture.

The full report can be accessed here.

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