The September 2024 RICS Residential Survey points to sustained improvement in market activity, with measures of demand, sales and new listings returning positive readings.
A net balance of +14% of respondents cited an increase in new buyer enquiries over the survet period, broadly in line with last month’s figure of +16%.
This was the third successive report to show a positive reading for demand.
In terms of sales volumes, the aggregate net balance was +5% in September, roughly unchanged from +6% previously.
A net balance of +23% of those surveyed expected sales volumes to rise over the coming three months, rising to +44% when considering the year ahead.
Feedback was consistent with house prices rising at a national level, ending a run of negative or flat returns since October 2022, although the picture was weaker in certain geographies, most notably the West Midlands, South West and East Anglia.
Respondents (+12%) anticipated that prices would continue to rise over the coming months, rising to +54% when considering the year ahead.
In the lettings market, tenant demand continued to rise, shown by a net balance of +22% of respondents reporting an increase in September – slightly stronger than the +11% seen previously, but somewhat more modest relative to the average reading of +38% during 2023.
A long-running decline in the volume of landlord instructions coming onto the market showed little sign of abating, with the latest net balance slipping to -29%, compared to -21% last month.
As a result of this imbalance between demand and supply, a net balance of +39% of
respondents envisaged rental prices moving higher over the three months ahead, unchanged from the August results.
Reaction:
Malcolm Webb, risk director at Legal & General Surveying Services:
“After improving sales activity in August, a modest relaxation in interest rates and the inflation rate has again provided some momentum for the mortgage market in September.
“Sentiment in the residential sector is warming up and with a 12% annual increase in the number of homes for sale, it looks like the housing market is set to enjoy a fairly strong end to the year.
“In the short term, the level of remortgage activity is also forecast to rise in October, creating a golden opportunity for advisers to add value.”
Emma Cox, MD of real estate at Shawbrook:
“A renewed sense of optimism continues to drive demand within the property market, with sales activity showing a positive story.
“With confidence rising, sales expectations have also improved which is good news for the government as we head into October and the Chancellor’s Budget later this month.
“With the Governor of the Bank of England hinting at a more aggressive interest rate strategy, prospective buyers and sellers will be optimistic about their plans going into the year ahead, hoping to fix at lower rates than might have been expected at the start of 2024.
“Demand in the rental sector continues to be high with quality rental properties at a premium. Landlords that can offer energy efficient properties will particularly benefit from demand, as we head into the winter months.
“With the Renters Rights Bill coming and EPC targets re-introduced for 2030, landlords will be hoping for greater support and clarity from the government to support any investment needed in their properties moving forward.”
