The UK’s housing market remained subdued in May with no possibilities of impetus in the near term
The UK’s housing market remained subdued in May with no possibilities of impetus in the near term, according to the latest monthly housing market survey.
Although the number of homes coming on to the housing market turned positive for the first time since 2016, buyer demand continues to decline at a headline level but to a lesser extent than at the start of 2018, says the report from the Royal Institution of Chartered Surveyors (RICS).
Overall, the market saw a stable trend in new instructions in May, with the headline indicator turning positive for the first time in more than two years but average stock levels on estate agents books across the UK was steady at 42.5, which is still close to an all-time low.
The report says that it remains to be seen whether the increase in May truly marks the beginning of supply pressures easing.
Regionally, sales increased in the West and East Midlands, Scotland and Northern Ireland, but were either flat or negative across the rest of the UK. Looking ahead, respondents expect little change over the coming months at the national level.
Prices were unchanged in May with a net balance -3% following a marginal decline in April. However, as with the other indicators, there are large regional dimensions to this headline figure. London continues to show the most negative trends, with downwards movement also seen across the wider South East.
Notably, after nearly three years of solid price growth, momentum also appears to have slipped across the South West, as the price balance remained in negative territory for the second month in a row. By way of contrast, house prices continue to rise in the Midlands, North West, Wales, Northern Ireland and Scotland.
Alongside this, landlord instructions remain in decline. Given the lack of supply, rents are envisaged to increase further at the national level over the year ahead, the report says.
RICS chief economist, Simon Rubinsohn said that although agents are suggesting that a little more supply may have come onto the market in May, some of it from the buy to let sector, inventory levels still remain near historic lows.
He added, indeed, with the run rate on appraisals continuing to track below the numbers of a year ago it is premature to conclude that a sustained upturn in available stock is imminent. Against this backdrop, it is likely that the headline picture regarding activity in the housing market will remain subdued for some months to come. This is reflected in the feedback to the latest survey which shows sales expectations only marginally positive on a one year view.
