Housing market waking up
RICS released its latest UK Residential Market Survey last week
What they said:
New buyer enquiries and agreed sales pick up in February
New instructions are broadly stable
Stock levels remain low
This month's RICS Residential Market Survey builds nicely on the previous month's, in our view. If in January the UK Housing market started to stir, in February it started to wake up and we hope that in March it will get out of bed.
At a headline level, RICS reported that a net balance of +17% of survey participants reported an increase in new buyer enquiries during February marking the sixth consecutive positive monthly reading. At the same time, RICS agreed sales indicator also improved over the month, posting a net balance of +9% in February which, although only modestly positive, is the strongest reading since May 2021.
The challenge for estate agents remains securing enough homes on the market to meet buyer demand. Stock levels remain close to historic lows and these shortages continue to both underpin and drive house prices upwards.
Agents are mindful of the likelihood of further rises in Bank Rate and the fact that mortgage rates may continue to rise, however, they remain bullish on house prices on both a three and 12-month view and they expect house prices to continue to rise over both periods.
The patterns we see in the sales market are replicated in the lettings market. RICS members reported growing demand during February and a shortage of rental properties coming to the market. Agents, therefore, expect rents to continue to rise. RICS rental growth market indicator reached a net positive balance of 66% in February, its highest level since the inception of this series in December 2012.