The housing market remained buoyant in October, with surveyors reporting positive figures on buyer enquiries, agreed sales and new instructions and prices, according to the latest Rics residential market survey.

Rics says it expects this latest upturn in sales to continue for the rest of the year, as guidelines permit the housing market to remain open during the second lockdown. 

However despite the current positive picture, Rics says its survey indicates the outlook for sales remains more subdued moving into the second quarter of 2021, as respondents cite the withdrawal of government support measures and a difficult economic backdrop as concerns for the future.

During October the number of people looking to buy a new property increased at the headline level for the fifth consecutive month. 

In keeping with this  rise in demand, the number of new properties being listed for sale also increased for the fifth successive report. A net balance of +32 per cent of respondents reported a rise in new instructions. This is the longest run of growth seen in the Rics Residential Market Survey since 2013.

The number of properties sitting on estate agents’ books remains relatively low in the historical context, but October saw average stock levels move up from 42 to 43 per branch. 

As more properties are listed for sale and the pent-up demand continues, the number of agreed sales also continues to rise. In October, +41 per cent of respondents saw a rise in transaction volumes, which remains well above the average reading of +9 per cent over the past year.

Rics says that this activity is continuing to drive up house prices. However it added that feedback from this latest survey suggests the current rate of house price inflation could begin to moderate shortly. Meanwhile the twelve-month outlook points to a flatter trend to emerge at a national level. 

Rics chief economist Simon Rubinsohn says: “The housing market remains very busy and despite the second national lockdown, the sense is that this will persist over the coming months and into the new year. 

“However, there is understandably more caution about activity looking beyond the first quarter of 2021. Aside from the withdrawal of governments incentives, the market may also find the more challenging employment picture a significant obstacle even with interest rates set to remain close to zero for some time to come.

“That said, medium term expectations for house prices and private rents have barely been dented by Covid according to the latest survey. Indeed, the projections still point to increases likely to exceed wage growth highlighting the ongoing issue around affordability.”

The survey also looks at the UK rental market, and said this continued to see a growth in tenant demand in October, as the volume of landlord instructions declined at the national level.

However, Rics says that while expectations for rental growth over the near term remain positive for most parts of the country, London is the clear exception as a net balance of -55 per cent of respondents foresee rents declining over the coming three months.

Commenting on the residential figures MT Finance director Tomer Aboody says: “The bubble we have been seeing over the past three months is proving to be stronger than many could have predicted. 

“Indeed, it is the strongest performance for the housing market in well over a decade, with prices, house sales and instructions at high levels.

“This confidence in the market derives from a combination of stamp duty relief, cheap mortgage rates and buyers’ change in working conditions which has been brought about from lockdown. With more space needed, borrowers are taking advantage of the highly liquid financial markets, giving them the ability to borrow where they might not be able to in a few months once the economic ramifications of lockdown really come into play.”

North London estate agent and a former Rics residential chairman, Jeremy Leaf adds: ’The Rics figures are interesting but don’t give the full picture as the market quietened down a little towards the end of October/early November. 

“However, it has picked up again quite noticeably in the past few days as the prospect of a vaccine has improved. This has brought more buyers to the market than has been the case for several weeks and is stiffening the resolve of some sellers not to accept low-ball offers.

“On the ground, we are seeing more buyer and seller determination to get deals done in order for both to take advantage of the stamp duty holiday.”