The UK Residential Market Survey revealed a “subdued sales market” in the housing sector, with downbeat new buyer enquiries, agreed sales and new instructions.
Across the UK, enquiries from new buyers fell for the second month in a row. This follows a continued struggle with housing supply, with new instructions falling for the fourth consecutive month. Newly agreed sales were also in decline.
Survey participants also noted an annual decline in market appraisals, with appraisal numbers at their most negative since the survey began two years ago.
Tenant demand rose whilst landlords continued to exit the sector, and new landlord instructions declined at a pace that has “seemingly gathered momentum over the quarter”.
Meanwhile, the national indicator on house price inflation noted broadly flat prices with a net balance of -5%. The RICS said that “current conditions could place marginally downward pressure on headline house prices at the national level in the near term”.
However, they predict an increase in house prices over the next 12 months, with Northern Ireland, Wales, Scotland and the North West of England displaying the “strongest expectations” for house price growth. An increase in rent is also predicted.
RICS chief economist, Simon Rubinsohn, said: “The latest survey feedback continues to suggest that both buyer and seller activity remains in a holding pattern, hampered by political and economic uncertainty.
“Given the upcoming general election next month, it appears unlikely that these trends will pick-up to any meaningful extent over the remainder of this year.
“The picture remains very different on the lettings side however, with tenant demand gathering momentum over recent months. This is running against an increasingly tight supply backdrop for rental properties and seems set to squeeze the pace of rental growth higher going forward.”
Tamara Hooper, policy manager at RICS, added: “Persistent government meddling in the private rented sector has dampened landlords’ appetites to invest and expand their portfolios, with many consolidating their assets, or leaving the sector altogether.
“In addition, the regular changes to the PRS regime has decreased stability and standards for tenants.The Government needs to stop tinkering with PRS activity – through misguided eviction processes, taxation and fees – and help provide a careful balance between landlords and tenants’ rights.
“This will encourage more landlords back to the market as well as ensure that tenants, including those who are most vulnerable, are not at a disadvantage in being able to find a suitable and affordable home to rent.”