The RICS have today reported that new buyer enquiries, new instructions and newly-agreed sales continued to drift lower in February. New buyer enquiries fell for an eleventh successive month with 16% more respondents seeing a fall rather than rise in enquiries. Meanwhile, the number of agreed sales also remains slightly negative (net balance -17%), similar to figures seen over the last six months.
There continue to be significant regional variation in the results however, and new buyer enquiries continued to increase (taking a three-month average) in Scotland, Northern Ireland and Yorkshire and Humberside in February. Declining enquiries from new buyers were observed in London and the South East, as well as the East Midlands with the trend in most other regions broadly flat.
Some agents believed that the recent snow is contributing to the problems.
Altrincham Surveyor Ian Macklin FRICS ENCS said:
“Right now viewings are being cancelled and new instructions postponed until the weather changes.”
Meanwhile others believe that brexit jitters and talk about interest rate rises was also creating issues. Wolverhampton Estate Agent, Rosemary Cheadle of Worthington Estates said:
“We experienced an unusual slowdown in the market post the summer holidays 2017, which we feel may have been down to the talks regarding interest rate rises.”
Alongside ongoing concerns about affordability in some areas of the country, part of the problem may lie in the lack of choice of properties to purchase with the new instructions indicator falling once again, recording its lowest reading since July 2016. This has pushed the average stocks (per branch) on the books of agents who respond to the survey to a new record low of just under 42. John Andrews of Stourport estate agent Dolittle & Dalley spoke for many, saying:
“Plenty of demand, but not enough stock.”
Available stock levels also look unlikely to improve, with 15% more respondents indicating that the number of valuation appraisals being undertaken in February were lower than a year earlier.
The RICS also report that the national price balance was reported as flat in February – the ninth month in a row that contributors have reported little change in headline prices. The three-month price expectations paint a similar picture. The regional price data does however, continue to show significant divergence with the price readings particularly strong in Wales, the North West, Northern Ireland and the East Midlands. By way of contrast, feedback on prices remains negative to a greater or lesser degree in London, East Anglia, the South East and the North.
The Institite believe the longer five-year indicator for prices and rents continues to suggest that prices will increase at a slightly slower pace than rents, although, both point to growth of approximately 15% at the end of the five-year period.
Respondents were asked about the key factors driving demand for new build properties. At the national level, the main driver was the lack of stock in the second-hand market. This is followed by the appeal of the Help to Buy scheme with developer incentives and the ‘quality’ of new homes scoring lower.
The one region where the results differ slightly is London; the shortage of existing stock is viewed as a major influence but Help to Buy is viewed as even more important for driving demand for new build properties.