Downward pressure on UK house prices has continued according to the latest Rics Residential Market Survey for April.
However, there are positive signs with the current indicator reading for April -39% less negative compared to net balances of -43% and -47% seen in March and February.
There are marked variations at a regional level. While price drops in London slowed (net balance -9% compared to -45% in March), net balances fell deeper into negative territory across the South East (-62%) and East Anglia (-77%).
The Rics survey points to expectations of further house price falls over the next few months across the UK in aggregate, posting a net balance of -48% vs -47% previously.
However, the twelve-month outlook continues to improve from the lows hit during the end of 2024, returning a net balance of -16% in April compared to -24% in December (and up from -61% in November 2022).
With regard to new buyer demand, the headline net balance came in at -37% in April, which was down from a reading of -30% in each of the last two reports.
While the April figure indicated a renewed drop in buyer enquiries, it was better than the dismal figure of -43% posted back in January.
According to Rics, virtually all parts of the UK recorded either a negative or flat trend in home buyer demand, with the exception of Northern Ireland (where a marginal rise was reported).
Alongside this, the agreed sales indicator returned a net balance of -19% in April, up from a figure of -30% last month. In fact, this represents the least negative reading since July 2022.
On a 12-month view, forecasts point to a largely stable trend in sales activity emerging, registering a net balance reading of +3% (little changed from +1% last month).
Regarding supply, those surveyed indicated a generally flat picture for new instructions during April. In addition, a net balance of -36% of contributors reported that the number of market appraisals undertaken over the month was running below the equivalent period of last year. This suggests supply conditions are set to remain tight in the immediate future.
In the rental market, national tenant demand increased in the three months to April according to a net balance of +40% of respondents.
In line with this, a drop in landlord instructions was reported by a net balance of -31% of survey participants. With demand continuing to outpace supply, rental prices are expected to be forced higher over the near-term.
Commenting on the Rics data, Shawbrook managing director of real estate Emma Cox said that despite recent reductions to mortgage rates in the market, April’s fall in buying activity would largely be attributed to the removal of stamp duty relief for first-time buyers.
“As a result, rental demand – which has been high for some time now – continues to increase, outpacing the supply of quality stock and putting further strain on the housing market.”
Professional landlords have a key role to play in providing suitable, efficient properties to cater for the growing rental population, and many will be turning to different property types such as houses in multiple occupation (HMOs) and semi-commercial properties to maximise yields and remain profitable in the face of any market challenges.”
