RICS Residential Market Survey August 2020
The latest RICS Residential Market Survey shows a continued post-lockdown rebound in the housing market, although the outlook for the year ahead remains muted as the market anticipates the impact of changes in government support.
Strong buyer and seller momentum
- RICS reported that a net balance of +63% of estate agents saw a rise in new buyer enquiries in August rather than a fall – softening on July’s +75%, but strong momentum nonetheless.
- Meanwhile, a net balance of +46% reported a rise in the number of new properties being listed for sale, down from +59% recorded in the previous month.
- Newly agreed sales continued to ramp up for a third month. A net balance of +61% experienced an increase in transactions in August, with growth strongest in East Anglia, Wales, the South west and North east.
- A net balance of +44% of surveyors reported that prices rose in August – the strongest since February 2016. It marked a strong uplift from +13% in the previous month and -33% in May.
- Apart from London where prices are broadly flat, all parts of the UK are said to be seeing price increases.
- For properties listed at below £500k, 78% of respondents report that sale prices are coming in at least level with the asking price (from +63% in January), supported by the temporary reduction in stamp duty.
Caution for the year ahead
- Agents expect transaction levels to improve in the near term, with a net balance of +21% anticipating an increase in sales in the next three months.
- However, pessimism about the longer-term view deepened with a net balance of -17% expecting sales to fall over the year ahead, down from -10% in July.
- The pandemic has shifted views on what house buyers want. 83% of respondents anticipate demand increasing for homes with gardens over the next two years, while a balance of -62% and -75% expect demand to decline for homes located in highly urban areas and tower blocks respectively.
Landlord instructions plateau
- In the lettings market, tenant demand continued to improve although landlord instructions were broadly flat.
- Rental growth expectations over the near term have strengthened, with a net balance of +31% of contributors anticipating an increase.
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