RICS figures confirm short-term bounce but supply is very low

There’s more confirmation this morning that the housing market is enjoying a short-term bounce - and that’s before the effect of yesterday’s stamp duty initiatives.

The latest market snapshot from the Royal Institution of Chartered Surveyors, out today, shows a net balance of 61 per cent of its monthly survey respondents seeing a rise in new buyer enquiries over the past four weeks. 

The number of new properties being listed for sale also rose over the month, with a net balance of 42 per cent of survey participants noting an increase rather than decrease. 

As agents continue to deal with a backlog of sales held up by lockdown, the number of newly agreed sales moved into positive territory for the first time since February, with a net balance of 43 per cent citing an increase in completed transactions.

However, the average number of properties on agents’ books remain close to all-time lows – just 39 on average per branch, says RICS. And on prices, for the third successive report respondents have reported a decline in house prices.

“Key activity indicators in the RICS survey suggest that the market is enjoying a short term bounce following ending of the lockdown, with sharp spikes in the metrics tracking both buyer enquiries and new instructions” explains Simon Rubinsohn, RICS chief economist.

“However, there are worrying signs that this rebound may quickly run out of steam against the backdrop of a tightening in lending criteria by mortgage providers, and the uncertain macro environment particularly with regard to the employment picture. Respondents to the survey highlight both of these issues in explaining the broadly flat picture regarding sales expectation beyond the immediate uplift.

“Meanwhile, the issues around the sales market appear to be shifting sentiment in the lettings market with, somewhat ominously given the prevailing economic climate, rent expectations beginning to edge upwards once again.”