Buyer demand has levelled off somewhat, following a brief pull-back in the wake of the flurry of activity seen prior to the phasing out of the stamp duty holiday, the September 2021 RICS UK Residential Survey has found.
However, notwithstanding the steadier demand picture, the volume of newly agreed sales did slip back for a third month in succession, evidenced -15% of respondents citing a decline.
Looking ahead, near-term sales expectations improved modestly at the headline level up 11% from +6% beforehand. This would be consistent with a small acceleration in momentum through the rest of 2021.
With regards to supply, the recent decline in new listings coming onto the market shows little sign of abating. Respondents reported that the number of appraisals undertaken during September was below the rate seen 12 months prior, with the net balance slipping to -26% from -10% back in August.
Tomer Aboody, director of property lender MT Finance, said: “The stamp duty holiday may have finally ended but a combination of low interest rates and a lack of stock on the market means house prices continue to rise, now and for the foreseeable.
“In particular, houses with outside space are doing well, giving buyers room to work from home and the living conditions they need in this post-pandemic world.
“With rents rising as buyers who need to move can’t find available stock, or can’t afford to buy thanks to rising values, this is providing a boost to the rental market. With employers bringing staff back into offices for a day or two a week, this is pushing demand for rental properties near city centres.
“Although there is growing speculation about an interest rate rise, this is still unlikely in the short term. If this is the case, and stock levels remain low, property prices will continue to rise. Stamp duty is possibly the only lever left to pull in order to increase stock by reducing or removing it for downsizers.”
Jeremy Leaf, north London estate agent and a former RICS residential chairman, added: “This report reflects what we are seeing at the coalface – less activity and slower price growth since taking advantage of the stamp duty holiday proved impossible.
“But we’re seeing few signs of a market correction. Many buyers prefer being able to operate in the less frenzied environment prevailing today while continuing to take advantage of stock shortages and low mortgage rates in particular.”