Buyer demand and sales activity appeared to steady in January, but housing market professionals say this could pick up later in the year, a trade body survey found.
The Royal Institution of Chartered Surveyors (RICS) UK Residential Survey found that the response score for new buyer enquiries came to zero in January, indicating there was neither a rise nor a fall since the last month.
RICS said this had been gradually falling since the metric reached a high of 16% in August.
Additionally, the surveyors who responded to the poll gave a reading of 3% for agreed sales activity, which RICS said was “marginal in terms of growth” and softer than the reading of 7% in December.
More house sales and listings in the future
Looking ahead, respondents appeared to be optimistic about the near future, as they gave a response score of 10% for sales in three months’ time. Further ahead, agreed sales were expected to rise even more, according to a score of 30% for the market in 12 months.
How the housing landscape is set to shift
Sponsored by Halifax Intermediaries
Although expectations for agreed sales were strong in the 12-month prediction, this was weaker than the reading of 37% given in December.
Respondents gave a score of 25% for new instructions in January, suggesting a rise in property listings. Surveyors have given a positive reading for this for nine consecutive months, and the average stock levels at estate agents have risen from 41 available properties in July to 45 now.
Housing stock is still down in the context of long-term trends, RICS said.
There was a rise in the number of appraisals carried out in January, with a reading of 24%, higher than activity during the same month a year earlier. This was also up on a reading of negative 4% last month, suggesting the pipeline for new instructions was recovering.
House prices continue to rise
Respondents gave a score of 22% for house prices in January, pointing to an increase in values over the month. This was slightly down on a reading of 26% the month before.
Going forward, three-month price expectations received a score of 3%, compared to 14% in the previous survey, suggesting house price growth could be flat in the future.
Over the next 12 months, however, respondents gave a reading of 52% for house price increases, similar to the score of 53% in the last survey, indicating that this would rise in the long term.
Tenant demand stagnates
Surveyors suggested tenant demand fell in January, with the reading for activity falling from 18% to 3% quarterly.
Alongside this was a decline in landlord instructions at minus 19%, continuing the trend of this staying in negative territory in recent years.
RICS said muted demand was putting less upward pressure on rent prices, this was still predicted to rise in the future, with respondents giving a score of 23% for three months ahead. However, this was softer than the three-month prediction of 32% for rental prices made in December.
Tarrant Parsons, head of market analytics at RICS, said: “The latest survey feedback indicates that growth in buyer demand lost a bit of momentum through the early part of the year, with this flatter picture likely linked to the turbulence seen across money markets in the first half of January.
“Nevertheless, moving forward, respondents continue to envisage a slightly positive near-term outlook for sales activity. This should be further supported by the unwinding of some of the pressures around mortgage interest rates over the past couple of weeks.”
