Confidence in the residential property market is recovering following a Brexit dip, the UK Residential Market Survey published by the Royal Institution of Chartered Surveyors has found.
The market experienced a pick-up in confidence in August, and the report predicted prices and sales to rise over the next three and 12 months.
Last month 12% more respondents to the survey reported an increase in prices, though in London the price net balance remained in negative territory for a sixth consecutive month, with 30% more respondents noting a fall in prices over the period.
Price expectations over the next three months were positive for the first time since April with 10% more respondents anticipating an increase.
This slightly stronger picture was also reflected in price expectations for the coming year, with modest increases anticipated in most parts of the country away from the capital.
Simon Rubinsohn, chief economist at RICS, said: “There are clear signs that the housing market is settling down after the initial surprise of the outcome to the EU referendum.
“Buyer enquiries did dip again in August but only modestly, and more significantly, sales expectations are beginning to edge upwards once again.
“It is likely the swift response from the Bank of England, both in terms of the lowering of the capital buffer and the cut in interest rates, has played a role in helping to support confidence.”
Following a couple of months in which sales declined sharply in the aftermath of the EU referendum, volumes stabilised during August.
A key factor supporting the rising prices was the continued shortage of stock for sale, highlighted by a further reduction in new instructions during August. As a result, stock on estate agents books slipped for the third month in a row and is now approaching the record low posted in December last year.
Stephen Smith, director, Legal & General Housing Partnerships, said: “It is reassuring and welcoming to see the latest RICS sentiment index highlights a more optimistic housing market compared to reports released immediately after the Brexit vote. The results show the initial shock of the referendum has now subsided, and surveyors are now feeling more confident, particularly when it comes to their medium to long-term views.
“The time to reflect was needed and now after the traditional summer lull I hope we will start to see the housing market begin to stabilise in most areas of the country. The fundamental issue that continues to plague the market, however, is still the shortage of suitable housing stock.”
New buyer demand also decreased slightly across the UK as a whole, although the pace of this decline has eased significantly. A net balance of -7% more chartered surveyors have reported a fall in demand in August (up from -25% in July).
The Royal Institute for Chartered Surveyors is the world’s leading professional body for qualifications and standards in land, property, infrastructure and construction.