New RICS data points to limited house price growth in immediate future

New RICS data points to limited house price growth in immediate future
One would suggest that the market has shrugged off any jitters from the Summer and now, in most areas, those who are transacting on their sale or purchase are motivated with many areas continuing to operate in a ‘seller’s market’

New RICS data has found that for a second consecutive month new buyer enquires have increased while new instructions remained stagnant. The data revealed that house price growth expectations increased marginally in October but still point to "very limited growth over the months to come".

According to the report, respondents in all areas barring the capital and the North East reported growth.

The London data recorded an eighth consecutive negative monthly reading with 16% more respondents reporting a fall rather than a rise, while in the North East prices were reported to have remained broadly stable.

Contributors in the West Midlands and North West English regions reported the firmest price momentum this month with net balances of 55% and 47% of surveyors reporting growth.

Demand increased modestly at the headline level for the second consecutive month. Most areas saw some rise in buyer enquiries with respondents in Northern Ireland reporting the strongest growth.

On the supply side of the market, respondents reported a further slight fall in new instructions over the month and anecdotal evidence suggests that the tight supply conditions are a very dominant feature of the market at present. More surveyors reported a fall rather than a rise in new supply in most parts of the UK.

Agreed sales rose very modestly with a net balance of 5% of surveyors reporting growth and more areas seeing activity rise rather than fall. 25% of respondents forecast a rise in transaction levels over the coming months. At the twelve month horizon, a net balance of 18% of contributors expect activity to increase, however, this represents a significant moderation on the previous month when the corresponding figure was 35%.

Near term expectations for price growth edged up this month with a net balance of 18% of contributors forseeing a rise over the three months to come, up from 15% the previous month. Expectations are now positve in all areas except London, where respondents foresee prices remaining broadly flat in the near future.


Brian Murphy, Head of Lending at Mortgage Advice Bureau, commented: “The data released by the RICS today is based on sentiment and therefore provides us with a ‘coalface’ view of what Surveyors are seeing in the market. Overall, the report is positive, with many members surveyed reporting modest increases in activity and buyer demand. This is also reflected by 18% of those surveyed suggesting that house prices will continue to rise over the next three months, suggesting that as we move towards the end of the year, confidence in the market remains robust in many areas of the country.

Taking the report at face value, one would suggest that the market has shrugged off any jitters from the Summer and now, in most areas, those who are transacting on their sale or purchase are motivated with many areas continuing to operate in a ‘seller’s market’.

The ongoing market fundamentals of rock bottom interest rates, lack of stock coupled with demand, either from buyers or tenants, suggests that in the lead up to Christmas, the market will probably stabilise, with the longer term picture also looking positive in many areas going into 2017.

Central London continues to operate in a microcosm to the rest of the country, with prices flattening and market demand cooling. These two factors could lead to a cooling in prices going into 2017, which might offer a slight chink of light for those looking to get on or move up the property ladder in the near future.”

Andy Sommerville, Director of Search Acumen, comments: "Housebuilding will be firmly at the top of the agenda for the Housing Minister in the coming months as consumer demand continues to outweigh constricted property supply. Given the dearth of new affordable properties coming on to the market, it will be surprising if this issue is not addressed in the upcoming Autumn Statement.

Residential market voices were fairly subdued coming in to October as the market picks up from the lull of Brexit, yet there is a collective feeling across the sector of an upturn as we enter 2017. On a regional level, London continues to suffer from sluggish activity, with house prices dropping for the eighth consecutive month, yet modest increases in sales and enquiries were seen elsewhere in the country.

This week’s news of a Trump presidency is likely to rustle things up on a national and global level and marks another event in what has been an unexpected year. While economic uncertainty can have a negative impact on the housing market, as with Brexit, it’s far too early to tell what the long-term implications might be. In the short-term, market expectations are quietly confident and suggest a rise in transaction numbers rather than a fall.”

Join our mailing list:

Leave a comment



Our Next Event

Specialist Lending Roadshow June 2017

Specialist Lending Roadshow June 2017

Crewe - 20/06/2017

Northampton - 21/06/2017

Chingford - 22/06/2017

Brighton - 23/06/2017

Register now

Latest Comments

Oliver Conway
Oliver Conway 18 May 2017

Making a neat inventory is a good idea, but if the seller is not willing to provide it, can the buyer demand it?

view article
Bertrand
Bertrand 17 May 2017

First step to nationalisation of the private rented sector IMHO. Nanny state poking their noses into things yet again. I object, as a decent landlord, sometimes having to deal with some pretty awful tenants,...

view article
Izzy
Izzy 16 May 2017

This is such a great a post. I love the detail you've gone into. It's a very useful article for helping those who are looking at deciding which sector they would like to go into! When I first started investing...

view article
paul burnham
paul burnham 30 Apr 2017

Jeremy Corbyn's pledge that a Labour government would build 500,000 new council houses must electrify the general election campaign. Reliance on markets and the profit motive has brought huge housing-related...

view article
CommercialTrust
CommercialTrust 28 Apr 2017

Sadiq Khan?s announcement of an online database of landlords and letting agents who have been convicted of housing offences, appears on face value to be a variation of the already implemented Database

view article
warren
warren 26 Apr 2017

You're very welcome Mary! Glad you enjoyed them :)

view article
Mary Ward
Mary Ward 26 Apr 2017

Thank you for the wonderful ideas. First impressions can make or break a deal. It's sadly that many homeowners drop the kerb to create an off-street parking space.

view article
Tony Gimple
Tony Gimple 14 Apr 2017

I'm not at all surprised that so many landlords are still confused about what the tax changes really mean and how it will affect them. In particular, the blind rush to incorporation is leaving landlords...

view article
MH
MH 13 Apr 2017

You are right that the bank holidays are going to be spoiled in looking for the properties. But people who want to sell their property and looking for the better relocation, they can get benefits of this...

view article
bnellyb
bnellyb 08 Apr 2017

There will be an exodus of private landlords over the next 5 years as tax changes take effect, private landlords provide an important service to the rental market, why do housing associations and councils...

view article
Fred Cassman
Fred Cassman 07 Apr 2017

"Make it look like you are at home": often people forget this and share on facebook their location!

view article
jared townsend
jared townsend 05 Apr 2017

It'll be interesting to see how & if the Government's asset sale regarding mortgages helps

view article

Related stories

More articles from Property

Specialist Lending Roadshow June 2017

20th-23rd June

4 days
7 specialists
4 locations
Free to attend

Click here to register now