Although near-term price expectations remain downbeat, the net balance for new buyer enquiries has improved substantially.
Following the reopening of the housing market in England on the 13 May, the UK headline net balance for new buyer enquiries moved from a record low of -94% in April to -5%, according to the May 2020 Residential Market Survey from the Royal Institution of Chartered Surveyors (RICS).
In an extra question included in the May survey, contributors were asked for their views on potential shifts in the desirability of certain features of properties over the next two years.
Respondents across the UK predicted an increase in desire for properties with gardens or balconies (81%), near green spaces (74%) and greater private and less communal (68%).
Similarly, 78% of respondents felt there would be a fall in the appeal of tower blocks and 58% said properties located in highly urban areas will be less enticing.
Newly agreed sales remained in negative territory, with a net balance of -35%, alongside a net -20% of contributors reporting new instructions falling in May.
Activity metrics did not see meaningful change in Scotland, Northern Ireland and Wales, where restrictions on estate agents were not removed in May.
Looking ahead, near-term sales expectations turned broadly neutral in May, and 12-month sales expectations are now slightly positive.
With regards to house prices, the survey’s headline UK price indicator moved deeper into negative territory.
The national net balance slipped to -32%, compared to a reading of -22% in April, representing the weakest monthly figure going back to 2010.
Going forward, near-term price expectations remain downbeat, and 12-month price expectations also remain negative, with a net balance of -16% of survey participants anticipating prices will fall over the year ahead.
In the lettings market, tenant demand was down over the month and landlord instructions continued to fall sharply, extending a trend that predates the COVID-19 outbreak.
Ross Counsell, chartered surveyor and director at Good Move, said: “Today’s RICS Residential Market Survey results point to a slight improvement in the outlook for sales over the coming 12 months.
"It’s also reassuring to see that new buyer enquiries moved from -94% in April to -5% in May, which showcases a more stable demand – this is good news for the UK property market.
“However, we must not forget the impact that the current pandemic has had on both buyers and sellers.
"Today, people are a lot more cautious with their finances due to a decrease in home income caused by loss of work and other factors.
"Buyers would have once paid the asking price for their desired property, but now they’re going to be more inclined to submit a much lower offer.
"This is something sellers must be aware of, because buyers will start to ask if they’ll accept a lower offer on their property and may be inclined to look elsewhere if they say no.
“Moreover, consumer desires have also changed.
"Now, we’re seeing an increase in buyers wanting more space from a property, both indoors and out.
"Location will also be key, for example, people will want to be close to green spaces where they can go to walk, exercise or meet with friends and family.
“It’ll be interesting to see how the property market adapts to these changes over the coming months.”
