Dip in supply and demand in May
Enquiries from new buyers, new instructions from those wanting to sell, and agreed sales in the housing market, all once more declined in May, according to the latest RICS UK Residential Market Survey.
In addition, The Royal Institution of Chartered Surveyors noted that house price growth also lost momentum and is predicted to slow further over the next three months.
The Election effect
A fall in property coming on to the market is a recurring theme over the past two years, but anecdotal evidence from respondents to the RICS survey in May suggests this month’s drop may have been exacerbated by the General Election, as some adopt a “wait and see” approach.
In May, 25% more respondents cited a decline in fresh listings (compared to those reporting a rise), producing the most negative reading since July 2016. Alongside this, new buyer enquiries fell at the national level, having remained stagnant over much of the past six months.
At the same time, agreed sales continued to decline for a second month running.
Simon Rubinsohn, RICS Chief Economist, said: “Uncertainty related to the General Election may have contributed to what appears to have been a disappointing level of transactions in the housing market over the spring. Perhaps the most ominous signal emanating from the data released today is that contributors still expect house prices to increase at a faster pace than wages over the medium term despite the difficulty many first-time buyers are clearly having in taking their first steps onto the property ladder.
“The increasingly tight second-hand market remains a cause for concern with RICS tracking new instructions to agents recording its fifteenth successive negative reading. It is hard to see this as anything other a major obstacle to the efficient functioning of the housing market.”
In the lettings market, tenant demand rose only marginally, while new landlord instructions were again broadly flat.