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Housing demand slows amid rising prices – RICS

  • 10/12/2020
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Housing demand slows amid rising prices – RICS
New buyer enquiries rose 27 per cent in November, down from the 47 per cent increase in October suggesting a slowdown in demand, the Royal Institution of Chartered Surveyors (RICS) UK housing market survey showed.


This was the fourth consecutive month demand dropped since the high of 75 per cent in July. 

Furthermore, 25 per cent of respondents saw an increase in agreed sales compared to a reading of 41 per cent in October.  

Surveyors predicted sales would weaken in the year to come with a net balance of -21 per cent of respondents expecting this to be the case. Unemployment levels and the withdrawal of the stamp duty holiday were cited as reasons for a slowdown in purchase activity. 

In the near term, sales expectations were neutral with a net balance of 4 per cent of surveyors expecting an increase in sales over the next quarter, down from the 15 per cent who said the same last month. 

Despite the demand for housing levelling out in the last few months, new properties have continued to come to market as suggested by a net balance of 16 per cent of surveyors. 

House prices were also still on the rise, with 66 per cent of surveyors reporting increases across the UK. 

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


High house prices in subdued market 

Simon Rubinsohn, RICS chief economist, said: “It is clear from responses to the latest survey that there is considerable concern about the prospect of a sharp slowdown in transaction activity following the end of the first quarter of the coming year. 

“A scaling back in direct government support for the market is part of the reason for this but it is being compounded by expectations of material rise in unemployment as redundancy programmes begin to take effect. Meanwhile, there is little sense that the projected softer sales picture will feed through into pricing which is viewed as likely to prove rather stickier in the face of ongoing macro challenges. 

He added: “A key issue as government looks to continue to build the delivery pipeline will be the response of developers to a tougher market without the incentive of the stamp duty break and the tapering of the Help to Buy scheme. 

“Critically, it is not simply a numbers game with the latest price moves highlighting ever more acute affordability issues and the importance of ensuring adequate provision across tenures.” 


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