Coronavirus has “barely dented” sales and rental markets - RICS

The latest Royal Institution of Chartered Surveyors review of sales and rentals, often amongst the most pessimistic of analyses, says Covid 19 has “barely dented” the market.

The data, released this morning, says demand for properties and the flow of new homes listed for sale across the UK remained strong over the past month. 

During October, the number of people looking to buy property increased for the fifth consecutive month, with a net balance of 46 per cent of surveyors citing an increase in new buyer enquiries. 

In keeping with the rise in demand, the number of new properties being listed for sale also increased for the fifth successive month with a net balance of 32 per cent of respondents reporting a rise in new instructions. This constitutes the longest run of growth seen in the RICS monthly survey since 2013.

The institution notes that the number of properties sitting on estate agents’ books remains relatively low in the historical context, although October saw average stock levels move up from 42 to 43 per branch. 

Last month a net balance of some 41 per cent of contributors saw a rise in transaction volumes which remains well above the average reading of nine per cent over the past year.

There is some caution over 2021 however - although RICS says this is not a uniform worry amongst surveyors contributing to this latest report. 

Respondents remain positive about activity for the coming three months, with 17 per cent more contributors expecting sales to rise. 

“However, the outlook for the year ahead is more downbeat, as [a net balance of] 27 per cent of respondents anticipate sales to weaken over the longer timeframe” warns RICS.

Simon Rubinsohn, the institution’s chief economist, says: “The housing market remains very busy and despite the second national lockdown, the sense is that this will persist over the coming months and into the new year.

“However, there is understandably more caution about activity looking beyond the first quarter of 2021. Aside from the withdrawal of governments incentives, the market may also find the more challenging employment picture a significant obstacle even with interest rates set to remain close to zero for some time to come.

“That said, medium term expectations for house prices and private rents have barely been dented by COVID according to the latest survey. Indeed, the projections still point to increases likely to exceed wage growth highlighting the ongoing issue around affordability.”