Housing market stabilises in August as rent expectations rise – RICS
The net balance for new buyer enquiries rose to -19%, its least negative reading since January and its fifth consecutive improvement.
The housing market showed signs of stabilising in August as buyer demand and agreed sales moved away from recent lows, according to the UK Residential Market Survey from the Royal Institution of Chartered Surveyors (RICS).
The net balance for new buyer enquiries rose to -19%, its least negative reading since January and its fifth consecutive improvement.
Agreed sales recorded a net balance of -17%, up from a low of -38% in April and the least negative result since February.
Sales expectations for the next three months improved to -3% from -13% in July.
Over the next 12 months, a net balance of 6% expected sales volumes to rise, compared with 3% previously.
The house price net balance edged up to -28% from -29% in July.
Respondents still expected prices to fall during the next three months, with little change forecast over 12 months.
Northern Ireland continued to record price growth, while the North West of England reported a gentle rise.
New sales listings were unchanged, with the new instructions net balance at zero compared with -2% in July.
The market appraisals balance stood at -17%, showing activity remained below the level recorded a year earlier.
In the lettings market, tenant demand recorded a net balance of 18%, while landlord instructions stood at -14%.
The balance expecting rents to rise over the next three months increased to 44% from 33% in July.
Respondents expect rents to rise by around 3% over the next 12 months.
Tarrant Parsons, head of market research and analysis at RICS, said: “August’s results show a market that is gradually finding its footing, with key activity indicators having become progressively less negative over recent months.
“That said, any potential recovery remains fragile and faces two significant near-term tests.
“The Bank of England’s increasingly hawkish tone, on the back of renewed volatility in global energy markets, is a reminder that the borrowing cost outlook could yet deteriorate further.”
Parsons added: “And with the October Budget approaching, speculation over potential changes to property taxation is adding another source of caution for both buyers and sellers.
“As such, headwinds over the shorter term remain pronounced, even though recent market trends have appeared more stable.”
Reaction:
Jeremy Leaf, north London estate agent and a former RICS residential chairman:
“In our offices, a modest uptick in demand has coincided with holiday returnees re-starting property searches, albeit not in the same volume as this time last year.
“Buyers and sellers are finding it difficult to shrug off worries about the impact of the protracted war in Iran on the cost of living and mortgage rates in particular.
“Speculation about the impact of the Budget on taxes is adding to buyer caution.
“Continuing uncertainty in the sales market has resulted in more lettings activity with tenants taking advantage of their new ability to end fixed-term constraints under the Renters’ Rights Act.
“Rents have held firm, supported by supply shortages, especially of larger flats and family houses, as exiting landlords are not being replaced fast enough so standards are slipping too.”
Tomer Aboody, founding director of MT Finance:
“With the new prime minister already indicating further and harsher taxes to come for both homeowners and landlords, activity and confidence is more muted.
“Evidently, trying to squeeze every property owner further isn’t the way to encourage the economy or help it flourish.
“How well the year finishes for the housing market will depend on whether or not Andy Burnham is advised against further punitive taxes in the October Budget.”
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