Market woe as RICS says buyer numbers, instructions and sales drifting down

The housing market has started 2018 as it ended 2017 according to the RICS, with new buyer enquiries, instructions and sales all drifting lower.

The latest market snapshot from the Royal Institution of Chartered Surveyors shows that for the 10th month in succession, new buyer enquiries across the UK declined - in January there were 11 per cent more respondents reporting a fall rather than rise. 

Similarly, newly agreed sales also slipped, extending the run of negative readings back to last February. 

Going forward, surveyors responding to the survey predict a relatively stable sales trend for the near term with a belief that sales will pick up over the next 12 months.

There is, however, no sign of an upturn in the flow of properties coming to the market and with 17 per cent more respondents seeing a further decline in new instructions, the January figure is the weakest since May. 

Significantly, the pipeline for instructions does also not appear to be improving, with 10 per cent more respondents as a whole noting the number of valuations undertaken as below the figure for the equivalent period last year.

The national price balance remained unchanged from December with eight per cent more respondents seeing a rise in prices nationally. The RICS says this is consistent with further modest price growth.

Regional price trends, however, do continue to differ significantly.  

The London figure remains in negative territory, and falling prices are also reported across the South East, East Anglia and the North East, albeit all to a much lesser extent than London. 

On the opposite end of the scale, the North West of England, Northern Ireland and Wales posted the strongest price growth.

Looking 12 months ahead, price expectations are positive in 11 of the 12 regions covered by the survey. London was again the exception, although the net balance of sentiment amongst surveyors responding to the snapshot has turned ‘less negative’. 

“Lack of inventory on agents’ books continues to provide a major challenge with the number of valuations being undertaken not suggestive of a pick-up in new supply anytime soon” explains Simon Rubinsohn, RICS’ chief economist.

“Divergent regional trends remain very much to the fore with the market in many parts of the country still actually behaving in a solid if unspectacular way despite the downbeat headlines. Affordability issues continue to play a key role in explaining this pattern with those areas where house price earnings are most stretched seeing the softest markets.”