Agency listings activity hits 15-month low - RICS

The level of new listings coming to market is at its weakest since the end of the 2021 Stamp Duty holiday, new figures suggest.

The December 2022 RICS UK Residential Survey show a further weakening in the sales market at the end the year, with metrics tracking property sales, instructions and price trends all remaining negative.

At a national level, the net balance reading for new buyer enquiries came in at -39%, while the number of fresh property listings coming onto the sales market also fell, with the latest net balance of -23% representing the weakest return for this indicator since September 2021.

The net balance reading for agreed sales across the country among surveyors was -41% during December, down from -36% in November.

Respondents in the North West of England, Scotland, Wales and London all cited a particularly subdued month for activity in the latest results. 

Looking ahead, near-term sales expectations turned a little more downbeat, posting a net balance figure of -54% compared with -46% previously. 

On a 12-month view, a net balance of -42% of respondents foresee sales volumes continuing to decline.

Meanwhile, a national net balance of -42% of respondents reported a decline in house prices over the latest survey period, compared with -26% posted in the November survey.
House prices are anticipated to remain on the retreat over the coming three months, with the latest net balance measure for this metric slipping to -66% from -58% previously.
 

The latest survey also asked if respondents are seeing greater interest from buyers in homes that are more energy efficient, around 40% of the survey sample answered yes, but 60% said they do not see this trend.

Meanwhile, 41% of respondents noted that sellers were attempting to attach a price premium on homes with a high energy efficiency rating and 61% of contributors stated that highly energy efficient homes were holding their value in the current market.

Simon Rubinsohn, chief economist for the RICS, said: “The latest RICS Residential Survey highlights the emerging challenges in the housing market as new buyers grapple with more costly finance terms and uncertainty over the outlook for the economy.

“This is reflected in forward looking RICS indicators around both prices and activity. However, some signs of an easing in inflation pressures more generally could provide a chink a light particularly for those looking to take their first step on the property ladder.”

Mairead Carroll, senior specialist in land and property standards for the organisation, added: “It will be fascinating to see how important energy efficiency becomes to buyers over the next twelve months. We welcome the timely addition of energy- related questions to our residential survey as the cost-of-living crisis remains a growing concern.

“Anecdotally, we have heard that home buyers can be left confused by the EPC and the recommendations made, unsure what areas to prioritise in terms of improving the energy efficiency of their home.”

Commenting on the report, Tom Bill, head of UK residential research at Knight Frank, said: “The figures highlight the change that has taken place in the UK property market over recent months. 

“The experience for people completing their purchase last November contrasts sharply with the reality faced by buyers who are starting their search this month. 

“Mortgage rates are edging down as the shock of the mini-Budget works its way through the system but are still around 1.5 percentage points higher than last summer. A new normal is gradually emerging for rates and over the next few months we will get a clearer sense of how people react once they recalculate their budgets. This decision-making process rather than what happened last year will set the trajectory for the housing market in 2023.”