The residential property market is “struggling for momentum” as new buyer interest falls and sales expectations turn negative across the UK, according to the Royal Institution of Chartered Surveyors.
The September 2018 Rics UK Residential Market Survey found a slight fall in new buyer demand and a deterioration in new sales instructions across the market, as the net balance reading slipped to -11 per cent from -9 per cent in the previous month.
The results suggested a renewed fall in new buyer enquiries due to affordability constraints, lack of stock, economic uncertainty and interest rate rises hampering activity.
The survey questioned chartered surveyors operating in the residential and lettings markets and found average stock levels on estate agent’s books was close to record low levels.
Rics reported sales expectations over the next 12 months had turned negative across the UK and found the time taken to complete an average sale had increased to 19 weeks.
House price growth was unchanged at 2 per cent in September and has fluctuated between 2 and 3 per cent for the past year.
The survey found a subdued sales outlook in areas such as London and the south east had placed downward pressure on house prices, while figures continued to rise in the West Midlands, Northern Ireland and Scotland with a positive expectation of rising prices in the coming 12 months.
Jeremy Leaf, former Rics residential chairman and north London estate agent, said the market had not seen the “autumn bounce-back” expected after such a quiet summer.
He said: “It is interesting that activity remains fairly flat nationally, which means London is still in negative territory, turning the old north/south property divide on its head.
“It is particularly disappointing that sellers seem reluctant to make their properties available in sufficient numbers, which would have improved choice and get the market moving in the period running up to Christmas.”
Mr Leaf said his customers are still citing Brexit uncertainty as a factor in a “needs-driven market”.
Craig McKinlay, new business director at Kensington Mortgages, said the figures showed the UK housing market was suffering from a bottleneck effect.
He said: “When we look at the big picture, a lack of supply coming onto market is slowing down the housing chain – discouraging homeowners from downsizing and in turn, preventing suitable properties being freed up for first time buyers or second steppers.
“With the Autumn Budget a few weeks away, it would be great to see the government offer incentives for older homeowners to downsize, for example an exemption from stamp duty.
“There has been a lot of focus on first-time buyers, quite rightly; but unless the government can make it financially worthwhile for current homeowners to move, then the bottleneck will only continue to be squeezed.”
Source: FT Adviser