Is the housing market turning? Good news for buyers as RICS survey shows dip coming

World News

Homes Under the Hammer reveals house transformation

We use your sign-up to provide content in ways you’ve consented to and to improve our understanding of you. This may include adverts from us and 3rd parties based on our understanding. You can unsubscribe at any time. More info

The UK Residential Market Survey (RICS) for May has now been published and although house prices may remain firm at present, the latest findings indicate we might be seeing a dip in momentum. This makes for a welcome change for new buyers, after average asking prices were smashing records month and month at the start of the year.

The average asking price for a property in the UK now rests at £367,501, which is up 2.1 percent from April.

Asking prices have risen more than £55,000 in the past two years, compared to the pre-pandemic average of £6,000.

The four-month price record coincided with the fourth successive Bank of England interest rate rise of the year, and initially, the staggering increase didn’t appear to be negatively impacting Briton’s urge to move house.

Rightmove research showed the number of buyers contacting estate agents as of early May was 31 percent higher than the more normal 2019 market, and sales were up 12 percent compared to the same period in 2019.

Despite the current backdrop of spiralling living costs, the main contributor to the increased house prices was attributed to the disbalance in supply and demand.

But as of the end of May, the RICS survey indicates a slight break in the ever-inclining pattern.

What does the RICS survey suggest?

The UK Residential Market Survey is used by the Government, the Bank of England and other key institutions as an indicator of current and future conditions in UK residential sales and lettings.

The survey is open for approximately two weeks towards the end of every month, of which results are compiled and published in a special monthly report.

May’s report indicates a dip in new buyer enquiries (which was previously seeing a steady incline during the first half of the year), while new instructions and sales remain more or less flat.

The new buyer enquiries figures have come in at -7 percent, which is down from +8 percent in April 2022.

Although this figure appears to be somewhat modest, it could be indicating slight ease in what was initially unrelenting momentum.

RICS reported the volume of sales was also slightly negative, with a net balance of -2 percent compared to -3 percent in April 2022.

DIYer transforms drab kitchen into a masterpiece for under £200 [PICTURES]
What you can buy in Spain for the average price of a UK home [INSIGHT]
Property market crash: World Bank recession warning – will price drop? [ANALYSIS]

The 12-month sales forecast is much more negative, with a net balance of -24 percent in May compared to -4 percent in April’s forecast, which is the softest reading since October 2020.

Anthony Codling, CEO of property platform Twindig said: “Whilst one swallow doesn’t make a summer, this could be significant as it brings to an end a run of eight consecutive positive readings for buyer demand.”

Interestingly, the RICS survey currently suggests a more positive outlook for house prices.

Members predict house prices to be higher a year from now with a net positive balance of +42 percent, however, this is down from its peak of +78 percent in February, and is its lowest positive since January 2021.

What could this mean for the housing market in the near future?

Mr Codling told “The reduction in new buyer enquiries if sustained, will take some of the heat out of the housing market.

“However, demand for homes is currently outstripping the number of homes for sale, so house prices are unlikely to fall, but the rate of house price inflation is likely to slow.

“Should buyer demand continue to fall and we reach a situation of more sellers than buyers, then house prices will fall, but we are not there yet.”

To read the full report, click here.

Source: Read Full Article