According to the Royal Institution of Chartered Surveyors (RICS) Residential Market Survey for November, a net balance of -25 per cent* of respondents said they were seeing a decrease in house prices. This was the lowest reading since May this year and according to respondents, it is more pronounced in the South East and South West of England.
As for price expectations over the next 12 months, -61 per cent of respondents predict the downward trend to continue.
Agreed sales declined too, with -35 per cent of respondents reporting a slowdown in activity. However, this was not as weak as the -45 per cent decline stated in October.
Buyer demand also fell, making it the seventh month in a row that this happened. Some -38 per cent of respondents witnessed a decline but again, this was softer than the -53 per cent drop in October.
There were fewer new instructions coming to market in November, with a net balance response of negative nine per cent. However, the average level of housing stock per estate agent branch saw a small increase from 34 to 35.
Healthy rental demand
In contrast, there was growth reported within the lettings market.
Respondents reported a rise in tenant demand, with 35 per cent citing positivity in the market. However, the supply of rental properties dwindled with -27 per cent of respondents highlighting a decline.
The lack of available rental stock is expected to influence rental prices with 45 per cent of respondents saying they expected rent to go up in the next three months.
Simon Rubinsohn, chief economist of RICS, said: “The overall tone of the latest RICS Residential Survey is understandably more downbeat than previously, reflecting the uncertain macro environment and the higher cost of mortgage finance. However, anecdotal comments from respondents capture the very real significant divergences in market behaviour at a more localised level.
“Although the headline price balance recorded two consecutive modest monthly falls in prices, and the forward-looking series indicate that this trend will extend through the coming months, the likely ‘job-rich’ recession suggests the downturn in the housing market this time could be shallower compared with past experiences. Meanwhile, the imbalance in the rental market remains significant as landlord instructions continue to fall and is consistent with further increases in rents, even if the momentum does appear to be slowing just a little.”
* RICS survey statistics are presented as scores between negative 100 and 100, with negative scores implying a decline, and positive readings suggesting an increase.
