Surveyors responding to the Royal Institution of Chartered Surveyors (RICS) Residential Market Survey reported that new buyer demand remained firmly negative in April, although a slight improvement on March was noted. Agreed sales also remained weak – unchanged from the previous month.
Meanwhile, near-term sentiment remains cautious. Surveyors expect the current muted conditions to persist over the next three months.
Looking ahead to 12 months, sales expectations have edged into marginally negative territory, with sentiment weakening progressively over each of the past three months.
The new valuation appraisals measure fell to negative 16%, down from zero the previous month, suggesting the pipeline of future property listings may weaken, meaning less choice for those buyers who remain committed to moving home.
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House price expectations
House prices also came under increased pressure. The headline house price indicator slipped further into negative territory to minus 34%, compared with minus 25% in March.
The survey highlights a widening regional divide, with stronger downward pressure reported in London, the South East, East Anglia and the South West, while the North West and North of England continued to post marginally positive readings. Prices were still rising in Scotland and Northern Ireland.
Looking ahead, near-term price expectations remained negative at minus 38%, although slightly less downbeat than March’s minus 45% reading. The 12-month price expectations were marginally positive at 5%, but this represents the flattest reading since late 2023.
The rental market continued to show demand outpacing supply. Tenant demand rose, with a net balance of 14%, while landlord instructions remained negative at minus 17%. A net balance of 25% of respondents expect rents to rise over the coming months.
Macro headwinds
Tarrant Parsons, RICS’ head of market research and analysis, said: “April’s results show a housing market still in the grip of macro headwinds stemming from the Middle East conflict.
“Recent warnings from the Bank of England that interest rate rises may be required to tackle renewed inflation, driven by elevated oil prices and disrupted supply chains, underline the challenging environment facing buyers. Until there is a clearer path for inflation and borrowing costs, activity and sentiment look set to remain subdued, particularly across Southern England and London, where affordability pressures are most acute.”
