Activity remains subdued in UK housing market: RICS

The UK housing market remains flat at a headline level in the run up to Christmas, according to the November 2017 RICS UK Residential Market Survey.

In November, the indicators tracking activity hovered in negative territory, although a little less so than previously. Meanwhile, says the report, both the current picture and the short term outlook for prices is broadly flat, with contributors unconvinced that the market is going to gain any momentum in the coming months.

Respondents to the November 2017 UK Residential Market Survey suggest activity will continue to be impacted by the continued shortage of new instructions, alongside general economic uncertainty.

The headline price balance eased to zero in November, says the organisation, indicating flat prices at the national level over the month. Once again however, there were significant variations at a regional level. London continues to see the most negative sentiment, 54% more contributors seeing a fall in prices rather than a rise.

Alongside this, both the South East and East Anglia also reported negative price trends. Elsewhere, the price balance was slightly negative in the North East, but stronger in all other regions/countries in the UK. In particular, solid gains were reported in Wales, Northern Ireland and the North West region.

Looking forward, the three month price expectations are also more or less flat at the national level as the net balance moved to -5% from -10% in October. Looking at price expectations at the regional level, sentiment again remains particularly cautious in London and the South East but, in contrast, contributors are confident that prices will rise in the North West, Wales, Northern Ireland and Scotland during the three months ahead.

The marked decline in in new buyer enquiries over the previous couple of months appeared to moderate in November, 5% more respondents noted a decline in demand (as oppose to an increase), compared to -19% in October and -21% in September.

Newly agreed sales continued to edge lower at the headline level with 10% more respondents seeing a fall rather than rise, compared with -20% in October. With the exception of Wales and Northern Ireland, where the feedback on the sales picture was reasonably positive, the numbers were either a flat or negative across most other areas of the UK. Going forward, national sales expectations remain flat for the coming three months.

New instructions to sell continued to deteriorate in November, as the supply crisis continues. This figure has now been declining for 22 months in succession. However, in part driven by the slower pace of sales, stock levels on estate agents’ books held broadly steady.

To give some idea of the future of new instructions coming on to the market, contributors were asked to compare the number of appraisals that were undertaken in November with the same period last year. Nationally, the largest share of respondents (49%) noted appraisals were lower, while only 15% stated they were higher on a like for like basis. As such, this does not bode particularly well for the new instructions pipeline.

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