The latest property industry survey from the RICS (Royal Institution of Chartered Surveyors) shows that the outlook for residential property sales for the next 12 months looks distinctly more upbeat. Northern Ireland, the North East of England and Scotland have all seen much stronger activity, and while during December agreed transactions fell nationally, and sales remained negative or flat across the rest of 2017, surveyors are still feeling optimistic about the future. The chances of a sudden upturn are still unlikely, with national sales expectations predicted to remain flat for the next 3 months. Yet there are signs that there will a pick up later in the year across all of the UK’s regions, with London having a positive reading for the first time since June 2017.
Stamp Duty Changes Having No Effect
Buyer interest overall edged lower during December as new instructions and sales fell. Although November saw new buyer enquiries coming closer to stabilisation, 15% more of the survey’s respondents reported that December saw a decline rather than an increase in demand. Another finding of the survey revealed that, as yet, there has been limited impact from the decision taken by the Government to remove stamp duty for the majority of first time buyers. In fact, over 85% of survey respondents showed that there has been absolutely no response to the change from first time buyers. Although the report does suggest that the lack of enthusiasm could be due to the winter season, when respondents were asked to predict the likely market impact of the policy change over the months to come, 66% believed that there would continue be little impact.
Ongoing Decline In Instructions But Increase In Prices
When looking at the number of available properties to meet demand, there has been a continued decline nationally in new instructions – a situation which has been ongoing for 23 months. This has been having a major adverse impact on the property market, but the good news is that almost a quarter of survey contributors noted that there were more appraisals in December- implying that a possible improvement could be on the horizon. In terms of property prices, there was a move of =8% in the headline balance in December. When compared with November’s zero reading, this measure is now suggesting that there could be a marginal increase in national prices over the months to come. As for the lettings market, December saw a continued fall in tenant demand, however there was a decline in the pace of that fall. With new landlord instructions declining slightly more rapidly, this shows a positive expectation for rental growth for the next three months.
The overall message of the RICS latest data is that, while the challenge of affordability is still increasing UK-wide, there are certain parts of the country in which the impact is more severe than others. This is evident from the sales expectation figures which are remaining positive in over half the areas which were surveyed as part of the report.
