There was a broadly flat picture for house demand and sales, in January according to the latest Rics UK Residential Property Survey. Despite this, survey respondents foresee the market picking up later in the year.
The new buyer enquiries indicator returned a net balance of zero, which meant that interest in home buying neither increased nor decreased. Agreed sales were up by a net balance of 3%, which is very marginal in terms of growth.
The future outlook for sales looks stronger, with the three-month look ahead for sales giving back a 10% result on balance. And according to Rics, the further you look forward, the more positive things become, a 30% net balance is recorded for twelve months from now.
House prices continue to rise across the country, with 22% net balance responses indicating rises over the month. Northern Ireland and the North West of England seeing the strongest momentum at present.
However, price growth appears more modest across Yorkshire & the Humber and the South East for the time being. Respondents firmly believe that house prices will continue to rise across the country over the next twelve months (55%).
In the lettings market, demand continued to falter with a 2% result, indicating marginal growth, very close to a flat picture. On the other hand, landlord instructions, which is to say landlords making property available for rent continued to reduce (net balance -19%).
So despite demand recording broadly flat to marginal growth, further reductions in availability continues to increase the gap between supply and demand. Unsurprisingly, a net balance of 23% believe that rents will continue to rise over the next three months.
Rics head of market analytics, Tarrant Parsons, said: “The latest survey feedback indicates that growth in buyer demand lost a bit of momentum through the early part of the year, with this flatter picture likely linked to the turbulence seen across money markets in the first half of January.
“Nevertheless, moving forward, respondents continue to envisage a slightly positive near-term outlook for sales activity. This should be further supported by the unwinding of some of the pressures around mortgage interest rates over the past couple of weeks.”
TML distribution director Sara Palmer commented: “The rush to buy seen in December, particularly from first-time buyers, has now been largely tempered as time starts to run out to complete ahead of the stamp duty relief ending in March. Instead, first-time buyers will likely have settled for building up their finances further in order to be in a position to buy later down the line, without having to make the compromises that may have been necessary to beat the deadline.”
She added: “Looking ahead to the spring and beyond, there are positive signs that the property market will strengthen with sales expectations reflecting this optimism. The recent interest rate cut has already prompted major lenders to cut mortgage rates, which no doubt has come as welcome news to mortgage borrowers.”