RICS January Survey suggests lack of market momentum
January saw little change in property market activity with enquiries, sales and instructions remaining in negative territory.
Whilst the results of the January 2018 RICS UK Residential Market Survey indicate a relatively flat outlook in the near term, the twelve-month forecast seemed more positive, particularly on a national level.
New buyer enquiries fell for the tenth consecutive month, with a net balance of -11% of agents observing a drop. Also seeing a decline were newly agreed sales, the 11th negative reading in a row. Looking to the future of the market, the picture seems relatively upbeat, with 33% of respondents forecasting an uplift in the long term. However, the report does highlight the modesty of this figure, particularly when compared to those in the past.
New instructions similarly didn’t give any indication of a rise, with the net balance recorded at -17%, the softest reading since May last year. Reflective of this fall was the decline in the average number of properties on estate agents books, almost weakening to the low levels observed last year.
Though 10% more respondents did observe an increase in the number of valuations during January, this figure is weaker than the percentage recorded during the first month of 2017.
Presenting a more positive outlook was the price balance on a national level. Whilst the 8% reading is the same as December 2017, it may signal the start of an upward trend as far as prices are concerned. However, the same cannot be said on a regional level, with the price gauge for London maintaining a negative reading. Whilst the falls in other areas were more modest – the South East, East Anglia and the North East – their decline signalled a further drop into negative territory.
At the other end of the scale, the strongest price growth was observed in the North West, Northern Ireland and Wales in terms of net balance.
Feedback from the RICS survey suggests that the market is proving to be challenging for those in higher priced tiers. For example, around 67% of agents stated that properties valued at over £1 million were selling for under the asking price. At 34%, the most frequently cited under offer percentage was between 5% – 10%.
On a near-term basis, the outlook for prices remains relatively unchanged, suggesting a slight slowdown in the pace of price growth. Looking further ahead, however, the picture appears more positive, with the vast majority of locations reporting a positive reading. Despite being the exception in forecasting a further fall, the negative reading in London became less negative – from -41% to -21%.