New survey shows
The May RICS Residential Market Survey for London has shown some signs of recovery across a number of indicators namely, sales expectations, buyer demand and new instructions, although prices continue to report declines.
The London housing market saw a third consecutive month of increases in new instructions in May, with 15% more respondents observing a rise (rather than fall) in properties coming on to the market.
Although the numbers of houses coming on to the market has increased marginally, average stock levels on estate agents’ books in London was steady at 37.
Looking at demand from buyers, the number of new enquiries rose marginally in the capital in May with 11% more contributors noting an increase in buyer enquiries. Comparatively, the regional picture is still incredibly mixed with six out of the twelve regions/countries (including London) covered in the survey also seeing an increase over the month.
In terms of agreed sales, respondents in London noted a marginal decline, posting a net balance of -6%. As a comparison, in other parts of the UK activity is rising firmly in just four regions. Sales increased in the West and East Midlands, Scotland and Northern Ireland, but, like London, were either flat or negative across the rest of the UK. Looking ahead, respondents expect slight rises in agreed sales over the next three months in the capital.
Moving to prices, London continues to show the most negative trends (with over two years of negative net balances reported), with downwards movement also seen across the wider South East.
Near term price expectations are also subdued in London with the net balance coming in at -27%.
Turning to the London lettings market, demand for rented properties slightly increased in May alongside landlord instructions, while rents are envisaged to marginally decrease over the next three months.
Simon Rubinsohn, RICS Chief Economist commented: “Although agents are suggesting that a little more supply may have come onto the market in May, some of it from the Buy to Let sector, inventory levels still remain near historic lows. Indeed, with the run rate on appraisals continuing to track below the numbers of a year ago it is premature to conclude that a sustained upturn in available stock is imminent.
“Against this backdrop, it is likely that the headline picture regarding activity in the housing market will remain subdued for some months to come. This is reflected in the feedback to the latest survey which shows sales expectations only marginally positive on a one-year view.”