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RICS: lack of choice dents UK housing market activity

Sales in the UK housing market have continued to lose momentum, while buyer interest remains flat, according to the latest survey from the Royal Institution of Chartered Surveyors (RICS), published today.

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The results of the RICS UK Residential Market Survey for April show that new instructions continue to drop and buyer demand is “stagnant”. RICS said that factors hampering activity included a lack of choice; uncertainty due to the calling of a snap election; and the ramifications of stamp duty changes.

In April, new instructions remained negative for a fourteenth month in a row at the national level, leaving average properties on estate agents’ books “hovering close to record lows”, RICS said.

New buyer enquiries were unchanged nationally, having failed to see any meaningful growth since November 2016. During April, a net balance of 4% of respondents saw a fall in new buyer enquiries.

Looking ahead, the flat picture for sales UK-wide is expected to continue over the next three months, and RICS said expectations had “moderated in virtually all areas of the UK when compared to the March survey”.

READ ABOUT LAST MONTH’S SURVEY

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Agents holding record low properties on books, says RICS

 

Simon Rubinsohn, chief economist at RICS, said: “Although the picture clearly does vary across the country, the bulk of the feedback we are receiving points to a fairly flat summer for both activity and prices. Lack of stock on the market remains a key challenge for the sector with recent and forthcoming tax changes having a material impact on transaction levels, particularly at higher price points. Uncertainty relating to the forthcoming general election is also highlighted by some respondents as a reason for inertia.

“It is noticeable in the April report that the amount of new rental instructions coming through to agents is continuing to edge lower, which is not altogether surprising given the changing landscape for buy-to-let investors. One consequence of this is that rents are expected to continue rising not just in the near term but also further out and at a faster pace than house prices.”

House prices continue to rise nationally, with the pace of growth steady over the past five months, although there is variation across the UK: in central London the indicator on prices has been in negative territory for 13 months. Price growth has eased noticeably in East Anglia recently and, along with the North East was not seen to have seen any increase in April. 

At the other end of the scale, in the North West, 67% more respondents noted higher (rather than lower) prices in April with the reading having been above 50% in this part of the country in each of the past seven months.

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