The RICS UK Residential Survey provides insights into the state of the housing market. While the latest survey indicates challenges such as higher borrowing costs and a cautious economic outlook, there are also signs of improvement in certain areas. Let's delve into the key findings from the survey.
New Buyer Demand: The survey highlights that new buyer demand has decreased, with a headline net balance of -37% in April. Although this reflects a drop in buyer enquiries, the figure is more positive compared to earlier this year. Almost all parts of the UK showed either a negative or flat trend in home buyer demand, except for Northern Ireland, which reported a marginal rise.
Agreed Sales: The agreed sales indicator improved slightly, with a net balance of -19% in April, up from -30% the previous month. While still negative, this represents the least negative reading since July 2022. Near-term sales expectations remain negative but have been progressively less downbeat over the past four months. On a twelve-month view, expectations suggest a stable trend in sales activity, with a net balance reading of +3%.
Average Sales Time: Despite the improved sales indicators, the average sales time has continued to lengthen. Respondents report that sales are now taking close to 20 weeks to finalize at the national level, compared to around 17 weeks a year ago.
Supply: New instructions coming onto the market remained relatively flat in April, resulting in a slight increase in the average number of properties on estate agents' books. However, the supply level remains close to historic lows. Additionally, the number of market appraisals undertaken in April was below the equivalent period last year, suggesting tight supply conditions in the near future.
House Prices: The survey reveals that house prices remain in negative territory, with a net balance of -39% in April. However, the decline is less severe compared to the previous months. Variations at a regional level show price declines slowing in London, while sinking deeper into negative territory in the South East and East Anglia. Near-term house price expectations indicate further falls, but the twelve-month expectations series has been gradually improving.
Rental Market: Tenant demand increased in the three months leading up to April, while landlord listings fell. With demand outstripping supply, rental prices are anticipated to rise in the near term.
The April 2023 RICS UK Residential Survey highlights the key challenges and improvements in the housing market very well, and while there are still obstacles to overcome, there are signs of stabilization and potential for enhanced growth in the future.
If you'd like to discuss how these insights impact your real estate goals or explore opportunities in the market, feel free to reach out and start a conversation.
Source: RICS UK Residential Survey, April 2023.
Note: The findings presented are based on the survey data and do not reflect real-time market conditions.