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RICS Residential Market Survey March 2022

Buyer demand solid

  • The RICS UK Residential Survey for March shows a net balance of +9% of agents noted a rise in new buyer enquiries. 
  • Although still positive, the reading for enquiries is a little softer than the +16% recorded in February. 
  • Agreed sales rose in March according to net balance of +9% of contributors. This reading in unchanged from February and remains indicative of a steady upward trend in transactions.

New instructions turn positive

  • Respondents cited a rise in the volume of fresh listings coming onto the sales market for the first time since March 2021. 
  • While only marginally positive, the current net balance for new instructions of +8% brings the survey’s metrics tracking changes in demand and supply more closely into line. 
  • Agents have also reported slight year on year growth in the number of appraisals being undertaken in each of the past three months. 
  • Despite more encouraging signs on the supply side of late, the current level of inventory remains close to historic lows.

Supply improves as instructions turn positive for first time in a year

Source: RICS

Note: Net balance = Proportion of respondents reporting a rise minus those reporting a fall (e.g. if 30% reported a rise in prices and 5% reported a fall, the net balance will be 25%).

Price growth still elevated

  • At a national level, a net balance of +74% of agents noted a rise in house prices in March. 
  • This is aligned with the previous month’s results and almost identical to the average seen for this indicator over the past twelve months (+75%). 
  • All parts of the UK continue to report a further uplift in prices, with Wales and the North of England seeing especially sharp rates of growth.

Outlook stable

  • Respondents envisage a further rise in house prices over a three and twelve-month horizon, posting net balances of +30% and +65% respectively. 
  • Over the next five years, contributors to the survey envisage house prices rising by just over 4%, per annum, at the national level. 
  • Near term sales expectations remain modestly positive, with the latest net balance coming in at +16% (up from +11% previously). 
  • Further ahead, the twelve-month expectations indicator now points to a broadly stable outlook for residential sales volumes at the national level.

Rental market 

  • Tenant demand continues to rise at a robust pace, evidenced by a net balance of +54% of contributors noting an increase in March. 
  • Interestingly, landlord instructions were reported to have increased for the first time since July 2020, with the latest net balance improving to +6% from -21%. 
  • A net balance of +64% of agents expect headline rents to be higher in three months’ time – amongst the strongest readings on record. 
  • Over the next twelve months, survey contributors foresee UK rental prices rising by c. 4.0% on average.

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