March demonstrated steady improvement in overall sales market conditions, the March 2024 RICS UK Residential Survey has revealed.
The survey showed that buyer demand continued to edge higher, while near-term expectations pointed to activity gaining further traction over the coming months.
House prices stabilised at the headline level throughout the month, with forward-looking metrics suggesting that an upward trend may emerge later in the year.
Looking at buyer demand, an aggregate net balance of 8% of respondents reported an increase in new buyer enquiries during March.
This was up from 4% in the previous survey, and marked the third consecutive month in which this measure was above zero.
The latest net balance of -5% was consistent with a broadly stable trend in agreed sales, having seen little change from -4% last month.
Looking ahead at a 12 month view, a net balance of 46% of contributors envisaged sales activity rising.
The flow of new listings coming onto the sales market increased for a fourth successive report, evidenced by 13% of respondents citing a pick-up in new instructions over the month.
Similarly, contributors noted that the number of appraisals undertaken of late is above that of the previous year, rising by 21%.
On a regional level, the survey found that in Scotland and Northern Ireland, the house price net balance moved further into expansionary territory at 21% and 60% respectively, from 10% and 53% in February.
Respondents continued to predict house prices returning to growth over the next 12 months.
According to findings, all parts of the UK could see a rise in house prices over the year to come, with sentiment particularly robust in Northern Ireland, London and Scotland.
Across the lettings market, the aggregate gauge of tenant demand remained modestly positive at a net balance of 19%, marginally up on a reading of 16% last month.
Tenant demand did not appear to have quite the same momentum as found through the latter stages of last year, with this measure easing from a peak of 59% in July 2023.
That said, the supply of rental properties becoming available remained restricted, as the landlord instructions indicator once again exhibits a weak net balance reading of -19%.
Reaction:
Tomer Aboody, director of property lender MT Finance:
“With more stock coming to the market as confidence increases, we are seeing further buyer demand, taking advantage of consistent interest rates and lower inflation.
“With expectations of a reduction in interest rate growing all the time and more stock expected to be launched this spring, this positive sentiment is likely to continue, even as a general election looms on the horizon.”
Jeremy Leaf, North London estate agent and a former RICS residential chairman:
“Buyers and sellers are emerging from an extended hibernation, which resulted in a subdued market for much of last year.
“Better weather is coinciding with much more interest than we have seen for several months.
“However, the increased choice of properties is making it more difficult for buyers to make up their minds as they worry about missing out on an alternative.
“As a result, decision-making is more protracted and bargaining is harder so sales are taking longer.
“Prices are firming up but concerns about affordability are keeping a lid on sellers who think that more viewings will lead to much higher values.
“On the lettings side, affordability constraints are certainly playing their part with the pressure for higher rents building as supply is still not keeping up with demand.
“However, the quality of interest remains low, resulting in considerable additional checks to ensure tenants can pay their way for the length of the tenancy at least.
“Gently rising rents are the likely outcome and certainly the sharp increases seen last year are probably a thing of the past for the next few months at least.”
