Rics survey points to ‘more stable’ house price outlook as decline in buyers eases

Property prices and sales remain weak, but the outlook for the rest of the year looks brighter and more ‘stable’ than expected, according to a closely monitored real estate survey.

While the number of potential buyers remains low, last month saw “the least negative result since July last year,” according to the latest survey from the Royal Institution of Chartered Surveyors.

The home sales indicator was also “slightly less negative” in February, though the numbers are expected to continue falling over the next three months, the Rics said. Looking further ahead, sales levels are expected to stabilize, the company said.

This week, mortgage lender Halifax reported that house prices showed a surprising increase in February, with the average home rising by £3,116.

On a 12-month time horizon, the sales outlook appears more stable (even if the series is still marginally negative), with a net balance of -8 percent. This compares to -20 percent in January and a recent low of -45 percent in August,” the Rics said.

Prices remain lower and look set to remain so for the rest of the year, albeit to a lesser extent than previously forecast.

“About 60 percent of respondents suggested that prices were agreed below the asking price,” it added. “For properties priced between £500,000 and £1 million, the share jumped to just over 70 per cent.”

In Scotland and Northern Ireland, prices seemed to hold up better than in England and Wales.

Colin Townsend, a chartered surveyor with John Goodwin in Malvern, Worcestershire, said: ‘Despite all the bad news, the market continues to show its resilience. Yes, prices are under pressure and have come down a bit, but sales are being negotiated at a reasonable level.

“Provided sellers follow the advice and accept that asking prices should reflect the recent declines, deals will continue to be made.”

David Boyden, managing director of Boydens estate agents in Essex and Suffolk, said: ‘We saw an increase in orders but buyers are cautious, returning to more stock on the market and possible review of asking prices in the coming weeks. ‘

The average time it took to complete the sale continued to climb last month and is now approaching 19 weeks, the Rics said.

Shifts: Property prices remain low, according to a survey by the Rics today

Buyers: The number of buyers is still down, but showing signs of improvement

Inventory levels in the market remain close to historic lows, although the latest estimate was 34.8 properties per appraiser branch (34 in January), the report said.

Tarrant Parsons, a senior economist at the Rics, said: “The housing market continues to adjust to the tighter credit environment, with limited mortgage affordability still weighing heavily on activity.

Given the continued weakness in demand, house prices continue to fall and are expected to fall further at least in the first half of the year.

Looking ahead, near-term expectations suggest that market activity will remain generally subdued in the coming months, although the latest survey feedback shows tentative signs that the ongoing decline in buyer inquiries is now moderating.

What’s next? A graph with forecasts of real estate prices for the coming months

Inventory issues: The number of properties estate agents have on their books remains low

Sam Rees, a senior public affairs officer at the Rics, said: ‘Ahead of the UK budget on March 15, RICS emphasizes the vital role housing plays for the UK economy and the need to boost supply through new builds and refurbishments of commercial real estate. where appropriate, with due observance of the strictest standards.’

Mortgage rates hit a peak not seen in years in the aftermath of September’s mini budget, with an average two-year rate fixing of more than 6.5 percent in October.

Although interest rates have since fallen, it is likely that the price of new fixed-rate mortgages will rise again in the near term.

Last week, Nationwide Building Society said it was raising mortgage rates by up to 0.20 percentage point, just weeks after a series of cuts in home loan costs.

Fewer landlords selling homes?

Drop: New landlord orders continued to drop in February, the Rics said

The number of landlords directing real estate agents to sell properties continued to fall last month, albeit at a slower pace than the previous month, while tenant demand continued to increase, the Rics said.

It added: “Inevitably, given the persistence of imbalances, nominal rent expectations remain at a relatively high level of +45 percent. Moreover, this pattern is repeated in a large part of the country.’

Rees said: ‘With rising rents and declining housing stock in the private rented sector, the government needs to do more to support landlords exiting the market due to rising costs and regulatory challenges.

“Landlords continue to raise concerns with Rics about the lack of clarity and financial support from the government to meet costly energy efficiency improvement targets, further pressuring landlords to exit the industry.”