Market activity was stagnant in the month of the election build up as buyers and sellers continued to adopt a cautious approach.
New buyer enquiries decreased for the third consecutive month to a negative net balance of -9% according to the RICS Residential Survey for November.
Newly Agreed Sales also remain in a negative net-balance but the figure is starting to improve.
In September, 27% more respondents viewed newly agreed sales as deteriorating. This figure has since dropped to a negative net balance of -8%, suggesting the current climate post-election is looking a lot more positive.
Sentiment over both the next three months and a further twelve-month outlook is looking a lot more positive.
The three-month outlook has increased from +5% to +11% between October and November whilst 35% more respondents feel optimistic about the future.
However, housing stock entering the market remains at near record lows and continued to fall again in November.
On average, only 41 properties are on each estate agency book per branch.
The findings correlate with the annual NAEA Propertymark data recently released which suggests current housing stock is at a decade low.
Demand from home buyers had increased slightly in 2019, from an average of 318 per branch in 2018 to 320 in 2019, with an increase of 16 per cent over the last ten years. However, this is leading to increased competition for the limited housing available.
The average number of properties per branch in 2009 had been 65 per month, and despite an average high of 44 properties per branch in August 2019, the average has been remaining steady at 38.5 over 2018 and 2019 – a drop of 59% over the last ten years.
Furthermore, new instructions are down 16% across the UK when compared with 2018 according to the website Home.
Things become slightly worse in England and Wales with new instructions falling by 16% and London instructions dipping by a quarter when compared with 2018.
Mark Hayward, Chief Executive, NAEA Propertymark comments on the findings:
“2019 has been an interesting year for the property market. House buyers and sellers have been faced with a lot of uncertainty, which in turn affects sentiment and decision-making. Activity in the housing market has remained consistent when compared to the last year, which was expected, as buyers and sellers hold off on purchases until the outcome of the General Election and Brexit is clear.”
Guy Gittins, Managing Director, Chestertons, commented:
“If there’s one thing that slows the property market more than anything, its uncertainty and this morning, two big uncertainties have been removed: we will have a Conservative government for the next five years and we will be leaving the EU, with or without a deal.
“We more or less know what is in store with regard to policies affecting the housing market: it is unlikely that tax cuts on property will be high on the agenda for the immediate future given their proposed spending plans in other key areas such as health, education and policing, but the more extreme plans of the other political parties such as rent controls are no longer on the table.
“We expect that the considerable pent-up buyer demand which has been waiting for Brexit clarity will now be released. Sellers will in turn be encouraged by the increase in demand and are likely to start putting their properties on the market in greater numbers and the increase in sales could see prices bounce back quite quickly. We have already seen how quickly confidence can rebound with the pound surging to its highest level since June last year and the FTSE 250 hitting record highs, and buyers should consider acting sooner rather than later while prices are still at attractive levels compared the last market peak.”
Now that the election haze is clearing and the UK’s long term future is slightly clearer, will the market start to improve?
