The February 2024 Rics UK Residential Survey reveals a extra upbeat image for gross sales than was the case for many of final yr.
The near-term outlook remains to be cautious, partly because of the suspicion that the current easing in mortgage charges is prone to stall on the again of ongoing uncertainty in regards to the timing and velocity of rate of interest reductions.
On the UK degree, new purchaser enquiries stayed constructive for the second successive month (6% web steadiness) exhibiting a continued upwards pattern in purchaser demand.
areas throughout the UK, most have now proven a restoration in purchaser curiosity during the last two months.
Agreed gross sales have been flat in February (-3% web steadiness) and though that is much less constructive than in January it nonetheless alerts a stronger pattern in gross sales than was evident in a lot of the final 12 months (common web steadiness of -22%).
Trying forward, the gross sales expectations for the close to time period are constructive, and gross sales exercise is anticipated to achieve additional momentum over the approaching yr (web steadiness +42%) As well as, respondents throughout all UK areas/nations foresee residential gross sales exercise selecting up over the longer-term time horizon.
One of many extra noteworthy developments to return by within the February survey was a stable rise being reported in new directions to promote. The most recent web steadiness of +21% represents the strongest studying since October 2020, in distinction to the repeatedly unfavorable image cited all through 2023.
Common inventory ranges on property brokers books now sit at 42 properties, the best since February 2021, with respondents noting a rise in market value determinations over the month relative to the identical interval final yr.
Home costs nonetheless level to a downward pattern throughout the UK as a complete, however that is stabilising with the February determine the least unfavorable since October 2022.
In London, the turnaround within the worth indicator is barely extra pronounced. Trying forward, a web steadiness of +36% of respondents throughout England and Wales now envisage home costs returning to development on the twelve-month time horizon.
Within the lettings market, tenant demand continues to rise however at a quite extra modest tempo than beforehand. On the similar time, nonetheless, landlord directions are nonetheless dwindling, which means respondents envisage rents transferring larger over the approaching months albeit at a slower price.
Rics chief economist Simon Rubinsohn commented: “The February RICS survey supplies some grounds for encouragement across the gross sales market with not simply purchaser curiosity staying constructive for the second successive month but in addition the uplift in new directions to brokers.
“Whether or not the rise in inventory coming again to the market can be sustained is prone to be a essential consider explaining how issues play out over the steadiness of the yr particularly with new construct prone to stay constrained. Considerably, the rise within the variety of value determinations happening factors in the best course. And the federal government can be hoping that this pattern is given a lift by the change to CGT introduced within the Finances”.
He added: “In the meantime, there are indicators that the relentless upward pattern in personal rents is dropping momentum however recent demand remains to be comfortably outstripping provide on this space which suggests there may be unlikely to any vital reduction for tenants. Certainly, suggestions from respondents to the survey proceed to spotlight the challenges within the sector ensuing from a complete host of measures launched lately.”
Former RICS residential chairman and London property agent Jeremy Leaf stated the findings of the newest RICS survey chimed with among the different ‘push-me-pull-you’ stories seen lately.
“One month up a bit, the subsequent down a bit – it’s a sample prone to be repeated over the subsequent few months.”
He added: “In our places of work, we seen appreciable hesitation amongst patrons and sellers because the Finances approached. Many have been hoping for just a few goodies to be thrown their method, which might have made the entire course of extra financially enticing. Nonetheless, the Finances has been and gone with valuable little to incentivise because the Chancellor in all probability hopes that rising optimism means he had no purpose to additional stoke demand”.
