Following a steady January property sales are expected to pick up over the next three months despite the Bank of England’s recent rate rise and the cost of living crisis, according to the latest UK Residential Market Survey from RICS.
With stock remaining tight RICS said house price growth across the country will continue as potential buyers fight to secure limited properties.
Near-term sales expectations now stand at a 10-month high, with the latest net balance rising to +22% from +16% in both of the two previous reports.
In terms of the 12-month outlook, RICS said a headline net balance of +24% of survey participants envisage sales volume rising over the year to come, which makes for an increase on December’s +16%.
RICS said: “Looking at house prices, there seems to be no sign of the recent strong pace of growth losing much momentum.”
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Peter Beaumont, CEO at The Mortgage Lender:
“Demand continues to massively outstrip supply, and this will likely support the continued growth in house price inflation.
“However, growth will naturally and inevitably slow as the reality of buying a property becomes unfeasible for many. Despite the sharp growth we saw in the market in 2021 – house prices were up by a startling 9.8% last year – sellers may soon have to face the fact that the current economic environment could put the brakes on new buyer enquiries.
“With costs rising, it’s important that as lenders we are making considered and prudent assessments based on an individual’s situation. As the market reaches a pivotal point, buyers and homeowners should consider their options and speak to a broker who will help to find the right solution for them.”
Richard Rowntree, managing director, mortgages, Paragon Bank:
“The UK’s private rented sector is facing a stock crisis and supply is failing to keep up with demand, leading to rental inflation and intense competition for rented homes amongst tenants. With the new flow of property for sale stilted, it’s unlikely this issue is going to ease any time soon.
“It’s important that Government policy considers all tenures of property, not just owner-occupiers, and considers the importance of maintaining a healthy and vibrant rental sector. If rental inflation continues at current rates, many people could be priced out of the rented sector, as well as homeownership.”
Emma Cox, sales director at Shawbrook Bank:
“2022 is already proving to be a runaway success for those looking to sell. House prices are remaining at the record highs we’ve come to expect in the past 18 months and a lack of supply is underlying a sense of urgency up and down the property chain.
“However, a long-overdue shake-up could be on the horizon with Michael Gove at the helm of housing policy.
“The highly anticipated 12 step leveling up agenda announced last week has committed to improving local infrastructure, transport links and introducing a Decent Homes Standard for renters.
“These are positive steps for the market – both for current and prospective homebuyers – and if Gove’s words turn into actions we could see a shift both in property hotspots and homeownership figures.
“For now though the market is acutely aware of the rising cost of living and a second consecutive increase to interest rates which will have a knock-on effect on mortgage borrowing. Where possible buyers, and current mortgage holders, should ensure they are on the most competitive deal possible for their situation.
“While the market will remain complex, securing competitive terms now will offer greater protection against any unexpected changes amid rising inflation and wider market volatility.”
