Buyer demand on the up as supply nears all-time low
Buyer demand increased in June but the average number of properties on the books of estate agents are close to an all-time low of 39 homes, the Royal Institution of Chartered Surveyors (RICS) market report showed.
Surveyor responses are measured on a net balance of 100 per cent to –100 per cent depending on whether respondents report increases or decreases.
In June, 61 per cent of respondents reported a rise in enquiries, a strong growth from the –7 per cent and –94 per cent recorded in April and May respectively.
The survey, which was conducted before the stamp duty threshold was increased, showed surveyors were not optimistic about demand being sustained over the next 12 months with projections for the year in negative territory at –7 per cent.
New instructions and sales
New instructions rose in June, with 42 per cent of respondents citing an increase. This is up from the –22 per cent recorded in May.
Newly agreed sales were in the positive for the first time since February, at a net balance of 43 per cent of respondents reporting an increase in transactions.
House prices continued to fall as –15 per cent of respondents saw declines in June. This was a slight improvement on the –32 per cent recorded in May.
Property prices are expected to decline further over the next three months, with the net balance of respondents predicting this at –12 per cent. However, this is a change from the –43 per cent who cited a three-month house price decline in May, suggesting drops may not be as steep as previously thought.
Simon Rubinsohn, RICS chief economist, said: “Key activity indicators in the RICS survey suggest that the market is enjoying a short-term bounce following ending of the lockdown, with sharp spikes in the metrics tracking both buyer enquiries and new instructions.
“However, there are worrying signs that this rebound may quickly run out of steam against the backdrop of a tightening in lending criteria by mortgage providers, and the uncertain macro environment particularly with regard to the employment picture.”