THE May RICS UK Residential Market Survey shows sales activity rising in the East Midlands, and expectations for the next three months remain positive.
The regional picture remains mixed in terms of agreed sales. Sales increased in the East Midlands, alongside the West Midlands, Scotland and Northern Ireland, but were either flat or negative across the rest of the UK.
While nationally, 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), supply continues to decline in the East Midlands as 25 per cent more contributors saw a decline in new instructions.
Nationally, when contributors were asked to compare appraisals that were undertaken in May with the same period last year, 18 per cent more stated they were lower on a like-for-like basis. This does not appear to bode particularly well for the pipeline going forward although sales expectations remain positive.
Looking at demand from buyers in the region, while the number of new enquiries fell, the decline was modest in comparison to the beginning of the year. The regional picture across the UK also remains incredibly mixed in terms of demand from new buyers, with six out of the 12 regions/countries covered in the survey seeing an increase over the month. New buyer enquiries were reported to have increased in London, the South West, Yorkshire and Humber, West Midlands, Scotland and Northern Ireland.
Moving to prices, they continue to rise in the region, with 24 per cent more respondents citing an increase in May and 53 per cent more forecasting a rise over the next twelve months. House prices also continue to rise in the West Midlands, North West, Wales, Northern Ireland and Scotland.
However, as with the other indicators, there are large regional dimensions and London continues to show the most negative trends. Downwards movement was 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.
Turning to the lettings market, demand for rented properties remained unchanged (on a non-seasonally adjusted basis) extending a run of four 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 over the year ahead.
Simon Rubinsohn, RICS Chief Economist said: “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. 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.”
