Buyer demand turned positive for the first time this year in June, according to the Royal Institution of Chartered Surveyors (RICS), suggesting that the property market may be entering a more stable phase.
New buyer enquiries rose to +3% in June, the Institution’s latest UK Residential Market Survey found, marking a significant turnaround from the -22% reported in May. Sales activity also showed signs of recovery, improving to -3% in June compared to -25% and -28% in previous surveys, although they are expected to remain “subdued” in coming months.
“Encouragingly, near-term sales expectations have begun to edge higher, pointing to a modest shift in sentiment,” said Tarrant Parsons, RICS Head of Market Research & Analysis. “That said, confidence in the market remains somewhat delicate, with economic uncertainty at both the domestic and global level still seen as a potential headwind.“
More survey respondents reported that they felt positive about near-term expectations for sales than those who didn’t, although they expect sales to remain broadly flat over the next 12 months.
Market appraisals increase
Nearly one in five (16%) reported an increase in market appraisals compared to June last year, suggesting a healthy pipeline of properties potentially coming up for sale. However, new instructions to sell dipped slightly, dropping to +3% in June, down from +7% in May.
Mr Parsons said: “The UK residential market appears to be entering a more settled phase, with demand showing signs of stabilising following a period of volatility. The earlier distortion caused by transactions being brought forward ahead of the Stamp Duty changes now appears to have largely dissipated, allowing underlying trends to re-emerge.”
House prices in the UK remain broadly flat, the survey found, although Northern Ireland, the North West, Scotland, and the East Midlands all saw prices grow in June.
In the rental sector, demand remained stable over the month, but landlord instructions continue to decline. A number of landlords are thought to be leaving the sector following a series of tax and regulatory changes which have made it more expensive to own rental property.
Nearly one in four survey respondents (24%) said they expect rents to continue to rise over the near term, although this is considerably lower than in May, when 43% said they thought rents would increase over the next three months.
