RICS: Residential activity maintained steady increase in November

Jake Carter

December 10, 2020

Residential activity maintained its steady increase in November, according to the November 2020 RICS UK Residential Survey.

At the national level, a net balance of +27% of respondents cited an increase in new buyer enquiries during November.

This figure has eased for the four consecutive months, following the high of +75% posted in July.

New listings coming onto the sales market continued to rise in November, with +16% of contributors recording a rise last month.

This represents the sixth month in succession that contributors have noted an uptick in the net balance of new listings.

In addition, a net balance of +25% of survey participants saw an increase in agreed sales over the month.

Looking ahead, the net balance of near term sales expectations declined from +15% in October to -4%.

When the contributors were asked to look ahead 12 months, a net balance of -21% of respondents foresee weaker sales volumes next year.

Turning to house prices, respondents continued to see upward pressure on the market, the latest net balance detailed +66% at the national level.

This is broadly in line with the +67% posted in October.

On a three-month basis, near term price expectations showed a net balance of +13%.

Meanwhile, over the next 12 months, price expectations posted a net balance of +20% of respondents now expecting prices to rise.

In the lettings market, landlord instructions fell, according to a net balance of -19% of contributors.

Tomer Aboody, director of MT Finance, said: “The strong performance of the housing market this year has been impressive, particularly when you consider that many would-be buyers have had to contend with being in and out of lockdowns.

“Regardless, buyers have reacted positively, demonstrating that the desire to move home is strong.

“With transactional volumes still way down on historic figures, it’s not surprising to see prices rise, along with confidence in the future of the housing market.

“It is interesting to see landlord instructions falling, which could be the result of several factors, including investors looking to sell up before the potential hike in capital gains tax which looks likely to come next spring.

“The fall may also be down to would-be tenants or current tenants looking to buy themselves, taking advantage of low mortgage rates and the return of high loan-to-value deals.

“Finally, it could be that many are staying put, rather than looking to move in an uncertain market.”

Jeremy Leaf, north London estate agent and a former RICS residential chairman, added: “On the ground, it seems that housing market activity has hit the buffers in the past few weeks, borne out by the findings in the RICS survey.

“However, we see this more as a temporary seasonal lull rather than the start of any more serious correction.

“Nearly all previously-agreed sales are proceeding to the usual hurried exchange of contracts before Christmas if possible.

“Others are planned for soon after so that buyers can take advantage of the stamp duty holiday.

“We are not finding that prices are being renegotiated downwards either.

“Looking forward, there are potential hazards ahead in terms of worsening economic news and particularly rising unemployment.

“Yet the prospect of a COVID-19 vaccine and further release of pent-up demand is helping keep new enquiries, although lower than recent months, on a reasonably level path.”

Sign up to our daily email