Demand from new buyers nationally has weakened slightly for the second successive month, making the forward looking sales indicators also turn a little more pessimistic according to the September 2018 RICS UK Residential Market Survey. Respondents to the survey continue to cite the mixture of affordability constraints, a lack of stock, economic uncertainty and interest rate rises to be holding back activity to a certain degree.
Looking at new buyer demand, headline enquiries slipped again during September, with the net balance falling to -11%, (-9% in August). Having remained relatively stable over the four months prior, recent results appear to be pointing to a renewed decline in new buyer enquiries.
At the same time, the volume of new sales instructions coming to the market also deteriorated for a second month running. Unsurprisingly, this leaves average stock levels on estate agents’ books close to record low levels, with limited choice likely one factor hampering demand.
In another sign of a housing market struggling for momentum, the time taken to complete a sale (from initial listing) has increased to approximately 19 weeks. This represents the longest duration since the series was introduced back in February 2017. In terms of sales volumes, the newly agreed sales net balance remained slightly negative across the UK as a whole, moving to -9% from -13% in the previous report.
Regionally, the sales trend is flat to slightly negative in virtually all parts of the country. Northern Ireland and Wales were the only areas reported to have seen a rise in sales during September. Even so, this growth was relatively modest. Looking ahead, at the national level, near term sales expectations slipped for a fourth consecutive report, and further out, over the next twelve months, sales expectations have now also turned negative on a UK-wide basis. Again, respondents across Northern Ireland remain most optimistic with regards to the sales outlook, while, those in the South East are now the most cautious.
House prices remained more or less unchanged at the national level in September, as the headline price net balance inched down to -2%, compared with a reading of +1% in August. This is the fifth month where respondents, nationally, have reported little change in house prices. That said, with a lack of affordability in parts of the country remaining a key challenge, the subdued sales picture in these areas is still placing downward pressure on prices. Respondents in London continue to report the steepest fall in house prices on a regional comparison, whilst the South East and East Anglia deteriorated a little further in September. Elsewhere house prices continue to rise firmly, with the West Midlands, Northern Ireland and Scotland posting the strongest growth.