Property prices and sales remain sluggish, but the outlook for the rest of the year looks brighter and “more stable” than expected, according to the results of a closely watched survey of real estate agents.
While the number of potential buyers remains down, last month saw “the least negative result since July last year”, according to the latest survey from the Royal Institution of Chartered Surveyors.
The home sales indicator was also “slightly less negative” in February, although the numbers are expected to continue to decline over the next three months, the Rics added. Longer term, selling levels should stabilize, he said.
This week, mortgage lender Halifax reported that house prices made a surprise rebound in February, with the average home jumping by £3,116.
Future outlook: As house prices and sales slow, outlook looks ‘more stable’
“Ahead of twelve months, the sales outlook looks more stable (although the series is still slightly in negative territory), with a net balance of -8%. This stands against -20% in January and a recent -45% trough in August,” the Rics said.
Prices remain lower and are expected to remain so for the rest of the year, although to a lesser extent than expected.
“Around 60% of respondents suggested that prices were agreed below the asking price,” he added. “For properties priced between £500,000 and £1 million, the share has jumped to just over 70 per cent.”
Prices seemed to be holding up better in Scotland and Northern Ireland than in England and Wales.
Provided vendors follow the advice and agree that asking prices should reflect recent declines, deals will continue to close
Realtor Colin Townsend
Colin Townsend, chartered surveyor at John Goodwin in Malvern, Worcestershire, said: “Despite all the bad news, the market continues to show resilience.” Yes, prices are under pressure and have come down a bit but sales are trading at a reasonable level.
“Provided sellers follow the guidance and agree that asking prices should reflect recent declines, deals will continue to close.”
David Boyden, managing director of Boydens Estate Agents in Essex and Suffolk, said: ‘We have seen an increase in instructions but buyers are cautious returning to more stock on the market and a possible review of prices. asking prices in the coming weeks.”
The average time to complete sales continued to increase last month and is now approaching 19 weeks, the Rics said.
Changes: Property prices remain sluggish, Rics survey finds today
Buyers: The number of buyers is still down but shows signs of improvement
“The level of inventory in the market remains near an all-time low, although the latest estimate was 34.8 properties per survey branch (34 in January),” the report said.
Tarrant Parsons, senior economist at Rics, said: “The housing market continues to adjust to the tighter credit climate, with tight mortgage affordability still weighing heavily on activity.”
“Given the continued weak demand, house prices remain on a downward trajectory and are expected to experience further declines at least in the first half of the year.
“Looking ahead, short-term expectations suggest that market activity will remain generally subdued over the coming months, although the latest survey comments show tentative signs that the continued decline in buyer demands is moderating. From now on.”
And after? A graph showing house price forecasts over the next few months
Stock market problems: the number of properties that real estate agents have on their books remains low
Sam Rees, senior public affairs officer at Rics, said: ‘Ahead of the UK budget on March 15, RICS is emphasizing the vital role of housing in the UK economy and the need to boost supply through to new construction and conversions of commercial properties. where necessary while respecting the strictest standards.
Mortgage rates hit highs not seen in a few years following the September mini-budget, with the two-year average rate rising above 6.5% in October.
Although rates have since fallen, it is likely that the price of new fixed rate mortgages will rise again in the near term.
Last week, the Nationwide Building Society said it was raising mortgage rates by up to 0.20 percentage points, just weeks after making a series of cuts to its home loan costs.
Fewer owners selling properties?
Fall: New owner instructions continued to fall in February, Rics said
The number of landlords asking realtors to sell properties continued to decline last month, albeit at a slower pace than the previous month, while tenant demand continued to rise, the Rics said.
He added: “Inevitably, given the continuing imbalance, the nominal rent expectation reading remains at a relatively high +45%. Moreover, this pattern is repeated in much of the country.
Rees said: “With rising rents and shrinking housing stock in the private rental sector, the government needs to do more to support landlords exiting the market due to rising costs and regulatory issues.
“Owners continue to raise concerns with Rics about the lack of clarity and financial support from the government to meet costly energy efficiency improvement targets, further pushing owners out of the sector.”
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