Scotland and Northern Ireland recorded robust growth and a positive outlook for sales activity, whilst sentiment remained downbeat in London, parts of the wider South East, and to some extent, East Anglia, according to the latest Rics Residential Market survey.
In Northern Ireland, around 48% more surveyor respondents to the Rics survey saw a rise in prices which marks sixty consecutive months of an increase.
In Scotland, 36% more respondents have seen a rise in prices.
Prices also continue to increase firmly across the North West, the Midlands and Yorkshire and Humberside.
Looking at sales activity, the newly agreed sales net balance nationally saw 10% more respondents recording a fall rather than rise in August, which represents the most negative reading in five months.
Regionally, after a sharp fall in activity at the end of last year, sales are stabilising in London, but momentum is still slipping across East Anglia and the wider South East.
Sales in August were solid across Northern Ireland, Scotland and in the South West.
Regional divergence will persist
Going forward, near term sales expectations suggest this regional divergence will persist, with the market remaining relatively stronger further away from the South of England.
Lack of supply in the housing market is one of the main impediments to activity with the average inventory of unsold stock on estate agents’ books still close to historic lows, Rics said.
And 15% of respondents are seeing a fall in new instructions over the month, pointing to a decline in the supply of fresh stock coming on to the market.
Demand wise, interest from new buyers nationally remains flat, showing a slightly more cautious approach from property purchasers.
But buyer appetite is still reportedly strong in Northern Ireland and Yorkshire and Humberside.
In the lettings market there has been a further decline in fresh rental stock in August, a trend that has been emerging on the back of tax changes on buy-to-let properties, while tenant demand continues to rise firmly.
Rents are therefore expected to rise at a faster rate than house prices in the medium term, with average rental growth projections standing at around 3% per annum over the next five years, whilst prices are projected to rise by around 2% on the same basis.
Simon Rubinsohn, Rics chief economist, said: “While a combination of a lack of stock and some level of uncertainty, both relating to the interest rate outlook and Brexit, has had an impact on activity, the overall picture in these areas is still encouraging.
“The story in London and the South East is, as has been widely recognised, rather more challenging but it is important that this is not seen as being indicative of the wider market.”
Sales and price growth remain strong
Founder and CEO of Emoov.co.uk, Russell Quirk, said that the outlook is far from flat across the board, but the sluggish market performance in London and the South East will continue to dampen the national picture as a whole.
He added: “However, sales are stabilising in the capital and when this translates to positive price movement, London will reclaim its crown as the UK’s price growth front runner. In the meantime, both sales and price growth remain very strong in other regions and these areas will continue to carry their weaker counterparts as we approach the finish line for 2018.”
Director of lettings at Urban.co.uk Adam Male added: “A further decline in rental stocks is a direct consequence of landlords exiting the sector, a sector that was already in desperate need of more rental stock to meet demand, not less.
“Soaring rents may be welcomed by landlords with the resolve to jump through the latest lot of legislative hoops rather than throwing in the towel, but a 3% hike will be hard to stomach for those already struggling with current rental affordability.”