The January 2020 RICS Residential Survey results show continued improvement in market activity over the month as demand, sales and fresh listings all move further into positive territory.
In terms of new buyer enquiries, 23% of survey participants reported an increase in demand during January compared to the 195 recorded in December.
Agreed sales rose for a second month in succession at the national level, evidenced by a net balance of 21% of respondents reporting an increase.
New instructions coming into the market also increased during January, with 19% of contributors noting a rise, with 20% of respondents also reporting that the level of market appraisals undertaken over the month was higher than a year ago.
Despite the positive figures, average stock levels on estate agents’ books remain very low when placed in a historical context.
House price inflation gauges moved into positive territory in both London and the South East during January.
Northern Ireland and Scotland currently display the strongest growth in house prices across the UK.
Rob Barnard, director of intermediaries at Masthaven, said: “Industry sentiment seems to have improved as we start the year, with borrowers clearly pushing ahead with their homeownership aspirations now greater clarity around the political climate has been restored.
“Innovation from the mortgage market has helped to maintain credit availability for consumers.
“First-time buyers especially are profiting from the current low-rate environment to secure high loan-to-value products at favourable rates.
“However, we can’t just stop there. We need to capitalise on growing positive consumer sentiment and continue to offer products which cater to the modern-day consumer.
“As we continue into 2020, the industry needs to ensure later life and self-employed borrowers also benefit from increasingly flexible and innovative products and rates.”
The survey suggests that house price inflation will gather pace, with respondents anticipate prices increasing across all parts of the UK during the next 12 months.
Over half of contributors (56%) report that sales prices are still coming in below asking, which is a decline from 67% in October 2019.
Adrian Moloney, sales director of OneSavings Bank, added: “Whilst there are some positive signs that confidence is returning to the market, helped by historically low rates and healthy competition in the 5-year fixed buy to let mortgage arena, there is still plenty of work to be done on all fronts to bring the housing market back to full health.
“With the upcoming budget in March, buyers and sellers will be looking for tangible commitments from the government to address the dwindling levels of housing stock.
“House building must be central to the government’s plans in order to cure the systemic supply/demand issue and enable more people to get onto, and move up and down the property ladder.
“The prospect of a new housing minister in the expected cabinet reshuffle could also add further impetus to fixing the challenges in the market long-term.”
In the lettings market, 24% of respondents cited an increase in tenant demand with landlord instructions reported to have fallen by 13% of contributors.
Rents are expected to increase over the next three months.
By Jessica Nangle
Source: Mortgage Introducer