There was good news for the housing market this month, as the latest RICS residential survey suggested a continued increase in both property enquiries and new listings. The overall impression is one of positivity, which will come as welcome news for home buyers and property vendors.
The RICS residential survey is used by the UK government, Bank of England, and institutions such as the International Monetary Fund (IMF) to assess conditions relating to the UK residential sales and lettings markets.
According to RICS, new buyer enquiries have continued to climb for a second month, with a net balance reading of +6% in February.* This is the same level of growth as was reported for the previous month.
Of further interest is the fact that the data suggests that this trend extends to most parts of the UK, signalling a general growth in confidence for the property market.
*Net balance = Proportion of respondents reporting a rise in prices minus those reporting a fall (if 30% reported a rise and 5% reported a fall, the net balance will be 25%).
In terms of agreed sales figures, the report shows that -3% of industry respondents reported an increase rather than a fall. Although this is weaker than January’s result of 4%, both results are stronger than metrics covering the previous 12 months. Indeed, when looking at the past year, -22% of respondents reported an increase in agreed sales figures.
The outlook for the future also looks positive, with expectations that 6% of respondents will report increased near-term sales when compared to those reporting a fall. Overall, it is anticipated that the net balance for property sales could be as high as 42% for the year.
This trend is supported by an increase in the number of new instructions for sale, with the latest net balance of +21% representing the strongest reading since October 2020. As we reported in our 2024 market overview, this is a significant contrast to much of the gloomy property forecasting presented by some outlets throughout 2023.
“The February RICS survey provides some grounds for encouragement around the sales market with not just buyer interest staying positive for the second successive month but also the uplift in new instructions to agents. Whether the increase in stock coming back to the market will be sustained is likely to be a critical factor in explaining how things play out over the balance of the year, especially with new builds likely to remain constrained,” Simon explains.
“Significantly, the rise in the number of appraisals taking place points in the right direction. And the government will be hoping that this trend is given a boost by the change to CGT announced in the Budget,” he continues.
“Meanwhile, there are signs that the relentless upward trend in private rents is losing momentum but fresh demand is still comfortably outstripping supply in this area which suggests there is unlikely to be any significant relief for tenants. Indeed, feedback from respondents to the survey continues to highlight the challenges in the sector resulting from a whole host of measures introduced in recent years.”
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