he UK housing market continued to stutter in October with both demand from buyers and agreed sales declining once more, while price trends are now flat. With most UK regions showing a flat or negative trend in newly agreed sales, momentum in the market is likely to remain subdued in the near term, according to the October 2017 RICS UK Residential Market Survey.
Survey in brief
- National price indicator now flat with London and the South East still downbeat
- Subdued sales trends now being reported across most regions of the UK as demand from new buyers continues to decline
- 70% of respondent’s report sales prices are coming in below asking prices for homes valued at £1m+
- 62% of contributors noted sales prices were coming in lower than asking prices for homes listed at between £0.5m and £1m
Interest from buyers:
In October, interest from buyers continued to decline with 20% more respondents seeing a fall in new buyer enquiries over the month. Agreed sales were also reported to have fallen again with 20% more respondents noting a decline in transactions over the month at the national level. Regionally, Wales, Scotland and the North East were the only areas to see any pick-up for agreed sales, while sales trends were either flat or negative across the rest of the UK.
Going forward, national sales expectations remain flat over the coming three months, while the twelve month view has turned marginally negative.
Continued lack of stock
Following a couple of months in which new instructions were broadly stable, the latest results point to a renewed deterioration in the flow of fresh listings coming to market (net balance -14%).
In keeping with other indicators pointing to a slower market, it is now also taking longer to complete a sale, with the average time rising to 18.5 weeks nationally, up from 16.6 in February 2017 when the measure was first introduced.
What this means for house prices
Moving to prices, in October the survey showed 1% more professionals reporting a price rise nationally rather than fall (+6% in September). This figure is now consistent with a flat price trend on a UK wide basis, although there remains significant differences between regions. Respondents in London are continuing to report a decline in prices, with 63% more respondents reporting a fall rather than rise over the month (the poorest reading since 2009).
Similarly, respondents are reporting a weakening picture in the South East, while East Anglia and the North East also returned readings below zero. By way of contrast, the North West of England, Wales, Scotland and Northern Ireland have all reported sentiment consistent with house price gains.
Looking further ahead, over the next three months 11% more respondents are predicting some a decline in prices at the national level. The most cautious predictions for the near term once again come from London, although expectations are now negative in five additional regions (South East, East Anglia, South West, North East, West Midlands).
The twelve month view is stronger in most parts, with ten of the twelve regions/countries covered in the report expected to see higher prices in a year’s time. However, there are now two exceptions – in London and the South East prices are anticipated to decline and remain flat, respectively.