According to the latest residential market survey from Rics, enquiries from new buyers fell for the eighth month in a row, with 27 per cent of surveyor respondents reporting a drop in buyer demand.
This fall is feeding through into sales, with 24 per cent of surveyors reporting a fall rather than a rise in agreed sales. However, Rics noted respondents were optimistic that sales would rise over the course of the next year.
Almost a quarter (24 per cent) of respondents saw prices fall rather than rise in March. While this was an improvement on the 27 per cent that reported falls in February – which brings to an end eight consecutive months of worsening responses on prices – Rics noted that it still points to a modest fall in prices across the nation over the next couple of quarters.
That said, 15 per cent more respondents anticipate house prices will be higher in 12 months time.
There is yet more bad news on the instructions front, with figures becoming progressively weaker in each of the last four surveys. In March a net balance of 30 per cent of surveyors reported a drop in new instructions, compared to 20 per cent in December.
Rics noted that as a result, despite a drop in agreed sales, average stock levels remained at 42 properties per branch.
Simon Rubinsohn, chief economist at Rics, said Brexit remained a “major drag” on housing market activity, noting anecdotal evidence that would-be buyers were reluctant to commit to purchases due to the ongoing uncertainty.
He added: “Arguably more significant still are the signs that developers are continuing to adopt a more cautious stance with the trend in new residential starts now flat-lining. Against this backdrop, there is little possibility of delivering the uplift in supply necessary to address the ongoing housing crisis.”
Big issues overshadowed by Brexit
Adrian Moloney, sales director at OneSavings Bank, noted there seemed to be a “clear message” from buyers that purchase decisions were on hold until there was more certainty in the market.
He added that there were clear issues in the market that still need addressing, which have largely been overshadowed, such as the supply and demand imbalance, frozen property chains and limited home ownership for young people.
“Steps have been taken recently to address the supply/demand imbalance, including the chancellor committing £3bn extra to deliver 30,000 new affordable homes, but more needs to be done to ensure we are meeting these targets in order to create any real impact to the market,” he added.