The housing market saw an uptick in buyer enquiries in June, reports the Royal Institution of Chartered Surveyors, but it stresses that the long-term picture remains negative.
The headline net balance for buyer enquiries came in at 61 per cent in June. In April this read as negative 94 per cent and in May, negative 7 per cent.
New instruction listings also read positive in June – 42 per cent of contributors saw a rise – which compares to negative 22 per cent in May. Rics notes, however, that with 39 homes on average per agent, numbers are close to an all-time low.
Completing the trifecta of good news, agreed sales were positive for the first time since February this year. A net balance of 43 per cent saw an uptick in transactions, compared to negative 35 per cent in May.
Expectations for the next three months are positive as well: 16 per cent of respondents see sales rising. But as mentioned previously, the longer-term outlook is less cheerful: the reading for sales growth comes in at close to negative 40 per cent.
Meanwhile, house prices showed a decline for the third month on the trot, although they did move from negative 22 per cent in May to negative 15 per cent in June. Survey participants expect house price activity to continue this trend for the next 12 months, albeit with some flattening towards the end of this run.
Rental growth is expected to clock in at 1 per cent over the year, with returning tenant demand noted for the first time in three months and landlord instructions steady in June.
Rics chief economist Simon Rubinsohn says, 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.”
London estate agent and former Rics residential chairman Jeremy Leaf comments: “On the ground, we are also seeing an uplift in buyer enquiries and sales agreed.
“However, what is even more encouraging has been the increase we’ve noticed over the past few weeks in the number of properties becoming available for sale, which is helping keep prices in check and provide more choice for willing buyers.
“Another positive sign has been an increase in realism shown by buyers and sellers when agreeing terms. Many appear to recognise that the challenging economic conditions and possibility of a spike in Covid-19 could compromise activity so are trying to reach a compromise rather than becoming involved in protracted negotiations.”
