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Buyer interest up but sales slipping in ‘flatlining’ housing market ‒ RICS

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  • 08/08/2019
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Buyer interest up but sales slipping in ‘flatlining’ housing market ‒ RICS
There was a net eight per cent increase in the number of enquiries from new buyers in July, according to the latest residential market survey from the Royal Institution of Chartered Surveyors (RICS).

 

This is the second straight month there has been a small increase in interest from new buyers, with most UK regions seeing the rise, RICS reported. Last month’s increase was the first increase in new buyer enquiries since November 2016.

However, this has not translated into a growth in sales. The report found that while June had seen a three per cent increase in sales, last month this had reverted to a six per cent fall.

That said, there is a “slightly mixed regional picture”, with surveyor respondents across the North East and the West Midlands in particular reporting a “reasonably solid pick-up” in sales during the month.

 

‘Modestly positive’

Looking ahead, predicted sales for the near term have dropped from a rise of six per cent in June to a fall of two per cent in July. RICS also suggested that sentiment for the next 12 months is now only “modestly positive” for the nation as a whole.

New instructions for sales were unchanged for the second consecutive report, which followed 11 straight months of falling listings.

RICS said there seemed to be little prospect of a sustained rise in supply in the immediate future.

 

High value price cuts

The report noted that feedback from contributors suggested higher priced areas of the market were facing a more challenging environment.

For example, more than two-thirds of respondents said sale prices for properties listed at more than £1m were coming in below asking prices.

In contrast, for properties listed at up to £500,000, 59 per cent of surveyors suggest sales have been at least level with asking prices.

Simon Rubinsohn, chief economist at RICS, noted that all the key indicators for the market were “flatlining”, with concerns about Brexit and political uncertainty at the heart of the difficulties.

He added: “Some support may be provided by an easing in the cost of money which could feed through into lower mortgage finance costs, but this may be insufficient to provide a spur to lift activity given the clouds hanging over the economy.”

 

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