According the latest research from the Royal Institution of Chartered Surveyors (RICS), the UK housing 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 (27 months). However, although the numbers of houses coming on to the market has increased marginally, average stock levels on estate agent’s books across the UK was steady at 42.5, which is still close to an all-time low.
Looking at demand from buyers, while the number of new enquiries fell overall, the decline was modest in comparison to the beginning of the year. Demand from new buyers was reported to have increased in London, the South West, Yorkshire and Humber, West Midlands, Scotland and Northern Ireland. In terms of agreed sales RICS suggest although sales held steady for the second successive month at the headline level (with the least negative reading for fourteen months), the regional breakdown suggests that activity is rising firmly in just four regions; the West and East Midlands, Scotland and Northern Ireland.
No change was seen for house prices in May (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.
RICS expect near term price expectations to decline marginally on a UK-wide basis, with the net balance coming in at -9%. That said, this is mainly driven by a negative outlook for prices across the south of England. For the lettings market, demand for rented properties remained unchanged (on a non-seasonally adjusted basis) extending a run of five consecutive reports where respondents have reported flat tenant demand. 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.