Rise in buyers and sellers in SW housing market

More properties are coming on to the South West housing market, and stamp duty reform is continuing to provide a boost to sales volumes, according to the latest RICS UK Residential Market Survey.

In the South West, 28% more chartered surveyors have seen a rise in new instructions in January and 24% more respondents have reported a rise in new buyer enquiries.  Price momentum, whilst positive, continues to moderate and surveyors expecting a relatively flat price picture over the next three months.

Despite a month in which mortgage approvals fell to their one of their lowest levels, 16% more chartered surveyors have seen an increase in newly agreed sales in the South West over the past month and the number of agreed sales per surveyor showed a slight increase in January (up from 18 to 21).

Although the picture overall remains positive, anecdotal evidence from respondents suggests that the picture is quite mixed across the South West with some surveyors saying that the market in their area has slowed.  One respondent also questioned whether the imminent national changes in internet advertising would ‘polarize property marketing techniques and results over the next few months’.

Looking ahead chartered surveyors in the region are expecting a 2.2% increase in prices over 12 months, and 3.2% per year increase over the next five years.

Looking at the rest of the UK, Scotland and Northern Ireland’s housing market outperformed the rest of the UK in January, with more buyer enquiries, stronger price growth and higher confidence in the outlook. Northern Ireland’s housing market also witnessed the strongest price momentum for the fifth consecutive month, with 47% more respondents reporting increases in prices. However, the national results, which are based on England and Wales only, continue to signal a cooling market and price growth has all but levelled off with just 2% more surveyors expecting prices to increase over the next three months (its slowest pace since May 2013).

London market conditions continue to deteriorate with prices, buyer enquiries and sales falling. The latest data shows 49% more respondents saw prices in the capital decline and the short-term confidence outlook is negative, despite the longer terms sales outlook being more upbeat.

In the South West lettings market, demand is flat and supply remains negative, with 42% more respondents seeing a drop in new landlord instructions.  Consequently rent expectations for the next three months remain positive with 32% more chartered surveyors predicting a rise.  Nationally there is anecdotal evidence to suggest that some new build rental properties are coming to market and surveyors’ rental growth expectations now stand at 4.6% per annum over the course of the next five years.

Simon Rubinsohn, RICS Chief Economist, said: “The changes to Stamp Duty and pending introduction of LBTT in Scotland are, to varying degrees, providing an incentive to first time buyers, but there remain a number of challenges to market, such as ongoing affordability constraints, lack of stock and an air of caution in the run up to the general election.

Overall, while the RICS lead indicators suggest the level of housebuilding looks set to increase over the course of 2015, the volume of home starts will still fall considerably short of the number of new households being formed, let alone making a dent in the historic shortfall of housing across all tenures.”