Property Professionals Optimistic For Long-Term Housing Market Performance

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RICS Survey Suggests Stability in April and Growth in the Coming Year

The latest RICS Residential Market Survey suggests stability in the current market and growing confidence in the outlook for the next twelve months.

The monthly report measures positive and negative sentiment among chartered surveyors in the UK residential sales and lettings sectors, giving a picture of the last month and the attitude towards the next three months and the next twelve months in the property sector. It asks respondents questions in regards to both sales and lettings, making it a valuable source of information for investors interested in buying to let property or an investment property portfolio for sale.

The results for April 2024 were published this week, so let’s take a look at the various metrics measured.

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What Does the RICS Survey Reveal About the April Property Market?

According to the survey, the recent recovery in buyer demand has stalled slightly into a flatter trajectory, likely due to the impact of increased mortgage rates in the past few weeks.

The results for new buyer enquiries also suggest a flattening after a run of three consecutive positive results from the monthly survey. The headline net balance in April was -1%, down from +6% the previous month. However, the RICS points out disparate readings at the regional level, and the declining buyer demand is most found in London and the South of England.

When it comes to agreed sales, this indicator showed improvement in April (+5%) compared to the last month (-5%). This result displays a marginal uptick in monthly sales volumes and is the highest reading since early 2021.

Average stock levels are now at a three-year high, standing at 43 properties per branch. This is backed up by the reading for new instructions during April, with a net balance of +23% of respondents stating that they had an increase – the highest figure since late 2020.

When it comes to house prices, the headline indicator for April was the same as last month, suggesting stability in the market.

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What Does the Near-Term and Long-Term Outlook Look Like?

Expectations for the short term have moderated slightly, with near-term sales expectations for the coming three months falling to -1%. However, there’s a stronger positive sentiment towards the longer term, with a net balance of +33% for sales activity over the next year.

Although there seems to be a road bump in the current recovery in buyer demand, the future-facing sentiment suggests a more positive outlook for sales market activity in the coming year.

The near-term forecast for house prices has dipped to -13%, suggesting a bit more caution regarding the three-month expectations. However, the twelve-month expectations are the same as the previous reading, which is +38%, meaning respondents expect an uplift in house prices in the coming year.

What Does the RICS Survey Reveal About the Lettings Market?

The rental market is showing signs of slowing down, which is no surprise given the record-breaking rental demand and inflation seen in recent years.

However, the RICS survey shows that the net balance for tenant demand is still positive, with a result of +12% of survey participants reporting a rise in rental demand. This is down from a reading of +28%, suggesting that while the unprecedented soar in demand may be over, the pool of tenants is still vast.

This is compounded further by the short supply of landlord instructions. The latest balance is a negative of -13%, meaning the supply-demand imbalance in rental properties is likely to continue.

The supply-demand imbalance is pushing rents further upward, although not at the rapid rate seen previously. Rents are rising according to a positive net balance of +33% of respondents.

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Property Professionals Optimistic For Long-Term Housing Market Performance