UK housing sales expectations 'stagnant' as buyer demand softens

9th May 2024 09:03

(Sharecast News) - A slight upward move in UK mortgage rates over the past few weeks has dampened demand for housing, with near-term sales expectations softening, according to the latest RICS UK Residential Survey released on Thursday - though the rate of new listings was at its highest in more than three years.

The monthly sentiment survey of chartered surveyors showed that the net balance of new buyer enquiries declined to -1% in April down from +6% in March, snapping three straight months of positive readings.

RICS said that buyer demand was seen mixed across the UK, with falling demand mainly concentrated around London and the southern parts of England.

Meanwhile the net balance for sales expectations over the coming three months fell to -1% - the lowest reading since October - which the survey said paints a "more or less stagnant near-term picture".

"With financial markets recently paring back expectations around the potential scale of monetary policy loosening this year, near-term sales expectations appear to have been adversely effected," RICS said.

Projections for sales over a 12-month horizon also eased but still remained firmly positive, falling to a net balance of +33% from +46%.

The house price indicator for April was unchanged at a net balance of -5%, signalling a largely stable trend in pricing at the aggregate level, with upward trends in Northern Ireland and Scotland offset by flat or negative readings elsewhere.

As for supply, a net +23% of surveyors noted an increase in the flow of new instructions during April - the highest reading since late 2020 - while average stock levels rose to a three-year high of 43 properties per branch.

"Going forward, the pipeline for new instructions appears solid, evidenced by a net balance of +20% of respondents reporting that market appraisals are up on an annual comparison," the survey said.