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RICS Residential Market Survey September 2020

The residential housing market continues to show strength following the reopening of estate agents earlier in the year, with buyer enquiries, new listings and agreed sales remaining positive according to the latest RICS Residential Market Survey. However, pessimism for house sales in the year ahead is growing as estate agents anticipate the impact of job losses.

Source: RICS

Buyer and seller activity up for fourth month

  • RICS reported that a net balance of +52% of estate agents saw a rise in new buyer enquiries in September rather than a fall – albeit a softening on July’s and August’s levels of +75% and +63% respectively as post-lockdown pent up demand is released.
  • Meanwhile, new properties being listed for sale rose for a fourth month, with a net balance of +39%.
  • With a balance of +48% of agents noting that appraisals are up in annual terms, the pipeline for instructions over the coming months is set to be robust.
  • Newly agreed sales continued to ramp up for a fourth month with a net balance of +55% seeing an increase in transactions in September, with growth strongest in East Anglia, the South West and Yorkshire & the Humber.

Prices gain momentum

  • A net balance of +61% of surveyors reported that prices rose in September – the strongest level in well over a decade – with all parts of the UK seeing a rise, although London at a more modest level.
  • Pessimism for the year ahead
  • Agents continue to expect transaction levels to improve in the near term, with a net balance of +17% anticipating an increase in sales in the next three months.
  • However, caution about the longer-term view deepened with a net balance of -34% expecting sales to fall over the year ahead, down significantly from -17% in the previous month.
  • Meanwhile, a balance of +23% envisage prices to continue to rise over the coming quarter, with price expectations for the year ahead in marginally positive territory.

London rentals under pressure

  • In the lettings market, tenant demand rose for a fourth month, with all areas seeing an uplift except in London where demand fell.
  • Rental growth expectations at a national level over the near term remained positive, with a net balance of +19% of contributors anticipating an increase, while a balance of -67% expect rents in London to fall over the next three months.

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