The survey by the Royal Institution of Chartered Surveyors (RICS) revealed that valuers were still reporting on subdued conditions in the housing market, but positive signs were emerging.
Although more surveyors reported a decline in new buyer enquiries compared to those who have seen a rise, this proportion was slightly less downbeat than seen in March and April. Agreed sales also continue to edge lower, returning a net balance of minus 28%. A negative net balance implies that more respondents are seeing decreases than increases.
Signs of ‘stabilisation’
The sales outlook over the next three months has improved slightly, with expectations now broadly flat rather than falling.
Looking further ahead, 25% of respondents anticipated an increase in sales volumes over the next year, the strongest reading since February. Meanwhile, price expectations for the next 12 months remain in positive territory, with a net balance of 34% of respondents expecting prices to rise.
Meanwhile, on the supply side, a net balance of 7% of surveyors saw a rise in new listings, marking the 11th consecutive month of growth.
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Valuation activity also picked up, with 19% noting an increase in appraisals compared to a year ago, indicating a potentially more active summer market.
Tarrant Parsons, RICS’ senior economist, said: “Sentiment across the UK residential property market remains somewhat subdued, with ongoing uncertainty around global trade policies and the dampening effect of transactions being brought forward ahead of the stamp duty changes at the end of March continuing to weigh on buyer activity.
“However, near-term sales expectations are showing signs of stabilisation, suggesting that while muted conditions may persist in the short term, a further deterioration appears unlikely.
“Looking ahead, the outlook is more optimistic, with respondents anticipating a gradual recovery in sales activity over the next 12 months.”
Parsons said the pace and extent of any improvement will partly depend on the Bank of England’s ability to continue cutting interest rates.
£39bn housing investment to support ‘strategic delivery’
In yesterday’s Spending Review, Chancellor Rachel Reeves confirmed that the government will invest £39bn in social and affordable housing though a 10-year affordable homes programme, a move that RICS chief economist Simon Rubinsohn said “should provide greater certainty and support more strategic delivery”.
According to the government, it is the biggest cash injection for around 50 years.
Reeves added that she would be providing an additional £10bn for financial investments, to be delivered through Homes England, “to crowd in private investment and unlock hundreds of thousands more homes”.
Rubinsohn said: “The creation of a new housing finance vehicle via Homes England is also a potentially important step in boosting supply, particularly if it improves access to funding for smaller developers.
“Together, these measures could help address the UK’s chronic supply shortfall and support broader economic stability.”
