RICS South West Residential Market Survey, November 2017
Sales activity in the South West housing market remain flat in the run up to Christmas, according to the November 2017 RICS Residential Market Survey.
In November, both new instructions and to a much lesser extent new buyer enquiries remain in negative territory across the South West, although sales activity seems to have stabilised.
Looking at prices in the South West, 19% more respondents reported a rise rather than fall in prices in November, indicating moderate growth. Looking forward, the three month price expectations are in contrast negative with -11% more respondents predicting a fall rather than rise over the next three months.
New buyer enquiries remained flat in the region in November, with 2% more respondents in the South West noted a decline in demand (as opposed to an increase), compared to -1% in October and 10% in September.
Newly agreed sales also remained flat over the month, with 2% more respondents in the South West seeing a rise rather than a fall, compared with a net balance of -11% in October. Going forward, sales expectations look to return to a positive trend, with 13% more respondents predicting a rise in sales rather than a fall over the next three months.
New instructions to sell continued to deteriorate in November (-11%), as the supply crisis continues. Contributors have noted an acute shortage of new instructions over recent months. However, in part driven by the flat trend in sales, stock levels on estate agents’ books held broadly steady in the South West.
In the South West lettings market, interest from prospective tenants was more or less unchanged (on a non-seasonally adjusted basis) for the first time since 2015, with the net balance coming in at 0%. Alongside this, new landlord instructions continued to decline (-33% from -6% in October).
Simon Rubinsohn, RICS Chief Economist commented:
“It is perhaps not surprising that the headline indicators for both prices and activity are subdued as Christmas approaches. But once again the feedback we are receiving from respondents points to quite marked differences in trends across the country. It is clear from the results than the mood music in London and the South East is very much flatter than elsewhere and, interestingly, the forward looking indicators suggest this is likely to persist into the new year."
“It remains to be seen whether the scrapping of stamp duty for first time buyers announced in the Budget will provide much of a lift for the market," Simon continued. "There was not much evidence of this in the latest survey, which was conducted after the change in policy, and while most independent analysis casts doubt on whether there will be much follow through, it is still early days. However, if the move does trigger a wide debate about how best to tax property, it will serve a useful role.”
Roger Punch FRICS of Marchand Petit (South Devon), commented:
“Continued economic uncertainty is stagnating the market, overwhelming any expected improvement which would normally be triggered by a Stamp Duty change (which only compensated the negative effect of the interest rate change). Off-market sales continue.”
Simon Cooper FRICS of Stags (Exeter), commented:
“November was an excellent month for new valuations, new sales plus exchanges, far better than we would envisage for this time of year. Long may it continue.”
Peter Symons of Stags, added:
“Despite what should be uncertainty and clearly a settlement in the South East Market the South West remains with a strong and solid market ,there is confidence from buyers through all sections of the market place.”
Christopher Bailey MRICS of Knight Frank (Exeter), commented:
“The market is continuing well into December with active proceedable buyers offering fair prices. SDLT remains a sticking point and there is still a gap between buyer and seller as a result.”
Jeremy Priestley FRICS of Berkeleys (Poole), commented:
“The market is very quiet, even for the time of year. Little development activity, few motivated buyers and a paucity of vendors. All of these are apprehensive about interest rates, Brexit implications and government inertia.”