There has been a continued slowdown in home sales, and new buyer enquiries have fallen for a second straight month, in line with the newest Rics Residential Market Survey for August.
The consensus view amongst respondents for the yr forward has turned largely flat.
Looking on the new buyer enquiries indicator, the August internet steadiness of -17% marks an additional deterioration in comparison with the studying of -7% reported within the earlier survey.
Agreed sales additionally appeared to fall at a sharper charge than that reported final month, evidenced by the web steadiness slipping to -24% from -17% beforehand.
Looking forward, sales exercise is predicted to stay broadly flat within the coming three months and respondents now foresee a largely stagnant image over the twelve-month time horizon, as the newest internet steadiness dipped to simply +1% from +8% beforehand (representing the least optimistic studying since October 2023).
Turning to provide, the new vendor directions sequence posted a internet steadiness of -3% in August, indicative of a flatter development in new listings in comparison with latest months. In truth, the newest studying represents the primary event since June 2024 during which this measure has been under zero (and subsequently now not pointing to a point of uplift in new directions).
On the again of the latest weak point in new buyer demand, home costs are reportedly coming beneath a small diploma of downward strain on the nationwide degree.
Indeed, the headline home worth gauge produced a internet steadiness studying of -19% this month, down from readings of -13% and -7% in every of the 2 earlier month-to-month stories.
Within this, respondents primarily based throughout East Anglia and the South West of England are citing a extra noticeable decline in home costs relative to the nationwide common, returning internet balances of -64% and -46.
Supply and demand
In the lettings market, the web steadiness studying of 5% for tenant demand indicators minimal change.
At the identical time, landlord directions fell in line with a internet steadiness of -37% of respondents. This is probably the most detrimental studying relationship again to April 2020. Looking forward over the yr, respondents are forecasting 3% progress in rents on the nationwide degree.
Commenting on the newest numbers from Rics, Paragon Bank business director Russell Anderson mentioned: “A decline in landlord directions famous by surveyors is additional proof that provide is failing to fulfill the persevering with demand for privately rented houses. Survey respondents additionally anticipate additional hire rises, a main symptom of this imbalance between provide and demand.”
To handle this imbalance Anderson mentioned it was important to make sure that funding within the non-public rented sector remained viable. “That means creating an atmosphere the place landlords really feel assured to develop and keep their portfolios to the excessive requirements that renters rightly anticipate.”
He added: “Policymakers should contemplate the long-term influence of regulation and taxation on landlord confidence and behaviour. A balanced strategy that protects tenant rights whereas encouraging accountable funding is important if we’re to see a more healthy, extra sustainable rental market.”
Former Rics chairman and London property agent Jeremy Leaf commented: “Demand is weakening however we’ve got continued to agree sales of homes particularly over the previous few weeks throughout and because the summer time holidays. However, high quality is trumping amount by way of viewing numbers in our workplaces for the time being.
He added: “Around 25 per cent of our patrons and sellers too appear to have paused since rumours of extra property taxes being launched within the Budget started circulating.”
On lettings Leaf mentioned: “We have observed just lately many tenants seem to have reached an affordability ceiling simply as we’re approaching the busiest time of the yr for lettings exercise.
“Many are discovering it more and more tough to fulfill what they understand as unrealistic landlord aspirations for new and renewed rents regardless of the continuing drop in inventory partly prompted by landlords leaving the sector.”
