SALES activity in the East Midlands housing market continues to stutter, according to the latest RICS UK Residential Market Survey, June 2018.
Significantly, new instructions fell for a fifth consecutive month, with 26 per cent more respondents seeing a decline in the number of properties being put up for sale; the lowest net balance across the UK. Newly agreed sales in the East Midlands fell in June, following a run of four months where respondents saw an increase.
The lack of activity also continues to impact prices. In June, chartered surveyors in the East Midlands have reported more modest price rises, and are anticipating further softening of prices in the coming three months.
Looking at the lettings data, new instructions coming through to agents has dropped again* (a net balance reading of -40%). This is the thirteenth consecutive month in which the feedback has pointed to lower supply of rental properties coming to market. Anecdotal remarks, unsurprisingly, draw attention to role the change in tax treatment on investment property has played in driving this trend. The Rent Expectations series is pointing to a cumulative average rise of around fifteen per cent, across the UK, over the course of the next five years.
Geoff White, RICS Policy Manager said: “This is one of the most complicated market situations that we have seen in some time, and with some of the working policy solutions taking a long time to get to market we’re seeing a difficult situation get worse.
“The situation in the Private Rented Sector gives great cause for concern as supply continues to drop. It would appear that new policy on taxes and Stamp Duty have made it so difficult for landlords at a time when the UK needs more homes to rent, that many continue to exit the market. A standardised set of regulations would go some way to help ease the life of both those renting and those looking to let, and RICS continues to ask government for greater regulation through adopting the Code of Practice used by RICS professionals and others.
“In the meantime, the government also struggles to reach its house building target. The revised National Planning Policy Framework (NPPF) is to be announced soon but few hold out hope it will achieve its aim of significantly speeding up planning applications and actual delivery. The Prime Minister also tasked Sir Oliver Letwin to review build out rates and alleged land banking. His interim report suggests building a greater mix of tenures – including PRS – is the answer, and we look forward to the final recommendations.”