The momentum in the housing market continues to slow as buyer demand falls for the 12th consecutive month, the March 2018 RICS UK Residential Market Survey reveals.
Interest from would be buyers continued to decrease with 17% more seeing a fall rather than rise over the month in a trend dating back to March 2017. This is also seen in other key indicators as both new instructions and newly agreed sales remain in negative territory.
Simon Rubinsohn, RICS chief economist, said: “The latest RICS results provide little encouragement that the drop in housing market activity is likely to be reversed anytime soon.
“Apart from the implications this has for the market itself, it also has the potential to impact the wider economy contributing to a softer trend in household spending.
“This could make Bank of England deliberations around a May hike in interest rates, which is pretty much odds-on at the moment, a little more finely balanced than would otherwise be the case.
“The downshift in sales for the time being continues to be more visible in London and the South East with many other parts of the country continuing to show rather greater resilience. Feedback on expectations regarding transactions suggests this divergence will persist over the coming months.”
In March, the flow of properties slowed once again, marking the seventh consecutive month there was a fall in the number of houses being put up for sale. As such, average stock levels on estate agents’ books remains near an all-time low.
Sales also continued to fall in March, with 20% more respondents reporting a fall rather than rise, extending the run of negative readings stretching back to February 2017.
There was either a flat or downward sales trend this month and picture this year does look more positive with 17% anticipating an increase in sales over the next year at the national level.
At the national level the price balance remained unchanged coming in at zero, representing the joint lowest reading since February 2013.
London had the weakest feedback with a net balance of -47% citing further price declines. Respondents in the South East, East Anglia and the North East, also reported prices to be falling but to a lesser extent than in the capital.
Meanwhile, prices continue to drift higher across all other parts of the UK, with Northern Ireland, Wales and the East Midlands seeing the strongest readings.
Looking ahead, the three month outlook for prices remains flat, and continues a trend which was first seen in November last year.
But further out, the expectation is that prices will resume an upward trend at a headline level with a net balance of +47% anticipating prices to be higher in the coming twelve months.
Regionally, the North West, Wales and Scotland returned the strongest net balances. Unsurprisingly, London remains the only region in which contributors envisage prices falling over this timeframe.
In London, 55% reported a rise in the number of properties being withdrawn from the market, (compared with this time last year) while nationally no one noticed a change.
Richard Sexton, director, e.surv Chartered Surveyors, said: “Today’s results are a further indication of subdued activity in the housing market, as a lack of new supply further tightens the bottleneck for those trying to step on, or up the property ladder.
“The shortage of affordable housing is preventing many from becoming homeowners, particularly those in the capital, where just 16% of loan approvals went to small deposit buyers.
“We therefore urge the government and industry to work closer together by embracing modern methods of construction to reduce cost and speed up efficiency to deliver the hundreds of thousands of homes desperately needed.”
Steve Seal, director of sales and marketing, Bluestone Mortgages, recognised this problem of lack of supply with housing in demand but was fairly optimistic with the results.
He said: “Following past trends, today’s pessimism is unsurprising. However, there is plenty to be cheery about. Consumer appetite remains strong with levels of re-mortgaging hitting a nine year high last month and lending to first time buyers up 7% year-on-year.
“There is no denying, though, that an imbalance between supply and demand is contributing to heightened concerns of affordability for all those across the property ladder.”