Demand for new properties and new listings remained strong, according to the RICS Residential Market Survey
Activity levels remain robust, with buyer enquiries, agreed sales, new instructions and prices all remaining firm.
Demand for new properties and the flow of new homes being listed for sale across the UK’s housing market remained strong last month, according to the latest RICS Residential Market Survey.
With the housing market still open for business during the second lockdown, respondents expect the latest upturn in sales to continue for the rest of the year.
However, moving into next year, the outlook for sales remains subdued, as respondents cite the withdrawal of government support measures and a difficult economic backdrop as a concern further ahead.
Sam Hunter, chief operating officer of Homesearch, said: A significant number of buyers may be hit with a rude awakening if they aren’t educated about realistic timelines, with pressure mounting on the processing capacity of mortgage lenders, surveyors and conveyancers.
This all points to our belief that Rishi Sunak may well extend the stamp duty holiday at the last minute next year, rather than running the risk of a significant percentage of the market effectively collapsing overnight at the latter end of March, when transactions are just before the point of exchange but it’s obvious that they won’t complete within the current deadline, Hunter said.
During October, the number of people looking to buy a new property increased at the headline level for the fifth consecutive month, with a net balance of +46% of respondents citing an increase in new buyer enquiries.
In keeping with the rise in demand, the number of new properties being listed for sale also increased for the fifth successive report. A net balance of +32% of respondents reported a rise in new instructions and is the longest run of growth seen in the RICS Residential Market Survey since 2013.
The number of properties sitting on estate agents’ books remains relatively low in the historical context, but October saw average stock levels move up from 42 to 43 per branch.
As more properties are listed for sale and the pent-up demand continues, the number of agreed sales continue to rise. In October, +41% of contributors saw a rise in transaction volumes which remains well above the average reading of +9% over the past year.
Looking ahead, respondents remain positive about activity for the coming three months, with +17% more contributors expecting sales to rise. However, the outlook for the year ahead is more downbeat, as -27% of respondents anticipate sales to weaken over the longer timeframe.
Simon Rubinsohn, RICS chief economist, commented: The housing market remains very busy and despite the second national lockdown, the sense is that this will persist over the coming months and into the new year. However, there is understandably more caution about activity looking beyond the first quarter of 2021.
He said, aside from the withdrawal of government’s incentives, the market may also find the more challenging employment picture a significant obstacle even with interest rates set to remain close to zero for some time to come.
That said, medium term expectations for house prices and private rents have barely been dented by COVID according to the latest survey. Indeed, the projections still point to increases likely to exceed wage growth highlighting the ongoing issue around affordability, Rubinsohn said.
