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House prices set to fall further as demand for gardens rises – RICS

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  • 11/06/2020
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House prices set to fall further as demand for gardens rises – RICS
Surveyors reported that house prices fell in May and are expected to drop even further over the year, the Royal Institution of Chartered Surveyors (RICS) Residential Market for the month showed.

 

Surveyor responses are measured on a net balance of 100 per cent to –100 per cent depending on whether respondents report increases or decreases. 

In May, the net balance for house prices fell to –32 per cent from –22 per cent in April. RICS said this was the weakest monthly figure since 2010. 

As for the rest of the year, –16 per cent of respondents said they expected prices to decline. 

Although decreases were still being reported, new buyer enquiries rose to –5 per cent in May, a significant jump from April’s record low of –94 per cent.  

Newly agreed sales also remained in the negative with a net balance of –35 per cent but this was an improvement of the net balance of –93 per cent reported last month. 

Near-term sales expectations were neutral in May at a net balance of –4 per cent, up from –58 per cent in April. 

 

Price revisions 

Ross Counsell, chartered surveyor and director at property portal Good Moe, said: “We must not forget the impact that the current pandemic has had on both buyers and sellers.  

“Buyers would have once paid the asking price for their desired property, but now they’re going to be more inclined to submit a much lower offer. This is something sellers must be aware of, because buyers will start to ask if they’ll accept a lower offer on their property and may be inclined to look elsewhere if they say no.” 

Jeremy Leaf, north London estate agent and a former RICS residential chairman, added: “There is no doubt that there has been some release of pent-up demand as buyers and sellers emerge from enforced confinement, with many realising their present properties are unsuitable and trying where possible to bag a bargain.  

“The reality is that many sellers are reluctant to reduce the price substantially as around four out of five tend to be buyers too. They will only consider price drops if they can secure a similarly good deal on their next property.” 

 

Property requirement shift 

Respondents were asked an extra question in May about the desirability of certain property features and 81 per cent said they expected more demand for homes with gardens and balconies. 

Some 74 per cent said they predicted a shift towards properties near green spaces while 68 per cent believe homes with private, non-communal space will become more desirable. 

Additionally, some 78 per cent feel the appeal of tower blocks will decline and 58 per cent believe properties in highly urban areas will become less favourable. 

 

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