Housing Market Activity Continues to Slow, but Improvement Expected

According to the RICS UK Residential Market Survey for March 2018, interest from would-be buyers has continued to wane, with 17% more respondents seeing a fall rather than rise over the month in a trend dating back to March 2017. This subdued trend is also seen in other key indicators as both new instructions and newly agreed sales remain in negative territory.

One of the main factors impeding demand alongside the ongoing concerns over affordability, is apparently the lack of fresh stock coming onto the market. In March, the flow of properties slowed once again, marking the seventh consecutive month respondents reported a fall in the number of houses being put up for sale. As such, average stock levels on estate agents’ books remains near an all-time low.

Sales also continued to fall in March, with 20% more respondents reporting a fall rather than rise, extending the run of negative readings stretching back to February 2017. Looking at the regional picture, respondents in virtually all parts of the UK noted either a flat or downward sales trend this month. The picture for the year ahead does look more positive, however, with 17% of contributors anticipating an increase in sales over the next year at the national level.

Looking at house prices, at the national level the price balance remained unchanged coming in at zero, representing the joint lowest reading since February 2013.

However, there continues to be significant variation in the house price indicator at a regional level. London has the weakest feedback, with a net balance of -47% of respondents citing further price declines, with the South East, East Anglia and the North East also seeing falls. In contrast, prices continue to rise across all other parts of the UK, with Northern Ireland, Wales and the East Midlands seeing the strongest readings.

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