The October 2024 RICS Residential Survey results signal an improving market backdrop, as modestly positive readings persisted across key areas of activity.
Forward-looking indicators remained consistent with a further pick-up in sales volumes over the near-term, although the rise in bond yields in recent weeks is likely to present something of a headwind as it feeds through into general lending conditions.
Looking at buyer demand, the headline net balance for the new buyer enquiries gauge registered a reading of 12% in October, little changed from 13% previously.
This extended a run of positive returns for the series into a fourth consecutive month, albeit the latest reading is still only pointing to a modest upward trend in demand.
With respect to agreed sales, an aggregate net balance of 9% of respondents reported an increase in sales volumes over the latest survey period, up from a figure of 5% recorded last month.
Having stayed below zero throughout much of the previous two years, this marked the third successive reading in positive territory.
Nevertheless, the recent results signal a modest improvement, rather than a sharp upturn, at this stage.
Looking ahead, the near-term sales expectations series posted a net balance of 34% in October, up from a figure of 22% beforehand.
Similarly, a net balance of +6% of contributors foresee sales volumes rising over the next 12 months, even if this is slightly more moderate than the reading of 44% seen in September.
Respondents noted a greater level of market appraisals being undertaken compared to the picture at this point 12 months ago.
As such, this suggested the near-term pipeline for listings is relatively solid.
A headline net balance of 16% of survey participants reported a rise in house prices over the October survey period.
This was up from readings of 11% and zero in September and August respectively, and is consistent with house price growth gaining momentum steadily in recent months.
When disaggregated, Northern Ireland, Scotland, the North East, North West, and London all exhibited firmly positive net balances for the house price metric.
Jeremy Leaf, North London estate agent and a former RICS residential chairman, said: “Even though the recent cut in interest rates is now likely to be repeated later rather than sooner, market sentiment remains positive.
“New buyer enquiries are on the up and more sales are being agreed but progress is slow, particularly due to improving stock levels.
“Some first-time buyers are looking to take advantage of investors withdrawing from transactions due to recent rises in Stamp Duty and before their own liability for the tax increases next April.”
Tomer Aboody, director of specialist lender MT Finance, added: “It is interesting to see a further positive month in terms of enquiries and transactions, as buyers return to the market, possibly feeling that interest rates have either plateaued or reached a more affordable level.
“With the full impact of the Budget yet to be felt, a strong end of year still looks possible, as both buyers and sellers feel that this may be a good time to transact.”
