South West price indicator remains positive with London and the South East still downbeat
The UK housing market continued to stutter in October with both demand from buyers and agreed sales declining once more, while price trends continued to soften. With most UK regions showing a flat or negative trend in newly agreed sales, momentum in the market is likely to remain subdued in the near term, according to the October 2017 RICS UK Residential Market Survey.
In October, interest from would-be buyers in the South West was flat. Agreed sales were also reported to have fallen with 10% more respondents noting a decline in transactions over the month across the region.
Going forward, the South West sales expectations remain flat over the coming three months, while the 12-month view remains marginally negative, for the third month in a row.
The latest results point to a continued deterioration in the flow of fresh listings coming to the South West sales market (net balance -6%). In keeping with other indicators pointing to a slower market, it is now also taking longer to complete a sale, with the average time rising to 20.5 weeks nationally, up from 17.3 in February 2017 when the measure was first introduced.
Moving to prices, in October the survey showed 15% more professionals in the South West reporting a price rise rather than a fall, this is down from +32% in September.
Looking further ahead, over the next three months 6% more respondents are predicting a decline in prices across the South West region. The 12-month view is slightly more upbeat as the South West and nine other regions (out of 12) expected to see higher prices in a year’s time.
In the South West lettings market, tenant demand was resilient for the three months to October (net balance of +26% on a seasonally adjusted basis), while new landlord instructions remained in decline. Rental growth projections are modestly positive for the three months ahead while over the next five years, rents are anticipated to rise by an average of around 4.5% per annum. This compares with price growth projections of just above 2.5% over the same timeframe.
Simon Rubinsohn, RICS Chief Economist, commented: “The combination of the increased cost of moving, a lack of fresh stock coming to the market, uncertainly over the political climate and now an interest rate hike appears to be taking its toll on activity in the housing market.”