Editor's note: This brief was summarised by The Property AI Newsroom from a report by The Negotiator. Read the original article for full details.
Buyer demand and agreed sales improve after summer lull, RICS survey suggests
The latest RICS Residential Market Survey suggests estate agents could get busier in the coming months, although house prices remain under pressure. Buyer demand and agreed sales were still negative in August, but both indicators moved away from their record lows.
Sales market showing gradual improvement
The net balance for new buyer enquiries rose to -19%, its least negative reading since January and the fifth consecutive improvement. Agreed sales recorded a net balance of -17%, the least negative result since February and an improvement on April's low of -38%.
Expectations for sales over the next three months moved closer to neutral at -3%, up from -13% in July. A net balance of +6% expected higher sales volumes 12 months ahead, compared with +3% previously.
House prices remained under downward pressure, with the headline price net balance edging up to -28% from -29% in July. Respondents still expected price reductions over the next three months, with a broadly stable outlook over 12 months.
Regionally, London's price balance remained more negative than the headline average, though it improved on July. Northern Ireland continued to report rising prices, while the North West of England maintained gentle price growth.
New instructions were broadly unchanged at a net balance of zero, while a market appraisals balance of -17% showed weaker activity than a year earlier and limited scope for a near-term expansion in the listings pipeline.
Lettings: tenant demand and constrained supply push rents up
For letting agents, the market remains tight. Rising tenant demand and constrained supply continued to put upward pressure on rents, with the monthly tenant demand net balance at +18% and landlord instructions at -14%.
The net balance of respondents expecting rents to rise in the next three months increased to +44%, from +33% in July. Over the next 12 months, respondents expected rents to increase by around 3% on average.
Caution over the months ahead
Tarrant Parson, RICS Head of Market Research and Analysis, said August's results show a market gradually finding its footing as key activity indicators become progressively less negative. However, he noted that any recovery remains fragile, citing the Bank of England's increasingly hawkish tone amid renewed volatility in global energy markets and speculation over potential changes to property taxation ahead of the October Budget.
Jeremy Leaf, a north London estate agent and former RICS residential chairman, reported a modest uptick in demand as holiday returners restarted property searches, though not at the same volume as a year earlier. He also noted that continuing uncertainty in the sales market has pushed more activity into lettings, with tenants taking advantage of their new ability to end fixed-term constraints under the Renters' Rights Act. Rents, he added, have held firm, supported by supply.
Source: The Negotiator