Residential property vendors get cold feet
- Supply of homes dwindles further, but demand remains steady
- Completed transaction levels stay relatively unchanged month on month
The latest RICS Residential Market Survey report for March shows that, despite housing demand remaining relatively steady, the increase in price momentum prevails. This is allegedly comes as a result of limited property supply across the board and many regions are witnessing a decrease in new instructions compared to the previous month.
The report also highlights other factors that have seemingly affected demand, including the most recent stamp duty reform, as well as the impending General Election that’s leaving home buyers as well as property professionals within an air of uncertainty.
According to the March report, the RICS have found the General Election also seems to be causing the housing supply to lessen further, as many vendors within England are holding back on sales until plans for the property market are stabilised.
This balance between supply and demand means activity levels compared to February remain somewhat steady. That said, an increased number of respondents to the Residential Market Survey believe the market will pick up within the next quarter – rising from 10% in February’s survey to 15% in March. When considering what will happen within the property market in the next year, over half of respondents (52%) expect transaction levels to pick up.
Mark Riddick, Chairman of Search Acumen, comments:
“The continuation of a market cooling into spring is a sure indication of general hesitation that comes prior to elections. A possible hung parliament in May could actually prolong the market flatline until a stable government is established.
“With currently low supply of housing stock, price rises are expected in the next three months, which could have a detrimental impact on market growth in the second half of the year. Conveyancers remain optimistic that while growth may not parallel 2014 levels, there will be greater activity once we cross the election threshold.
“In the meantime, the state of the housing market should serve as a signal to all parties that initiatives such as the Help to Buy ISA or the Tories’ proposed Right to Buy are no more than plugged-in policy measures which do not solve the housing market’s core problems: lack of affordability and a scarcity in housing stock.”