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New residential buyer enquiries bounce back
Published April 18th, 2017
The West Midlands housing market continues to lack impetus, despite new buyer enquiries bouncing back and agreed sales remained stagnant in March. The number of properties coming on to the market also dropped further, and consequently respondents to the March 2017 RICS UK Residential Market Survey have reduced predictions for sales growth in the year ahead.
New buyer enquiries in the West Midlands were reported to be grow in March, following a fall last month, and although the picture remains mixed across the UK the areas with declining buyer interest outweigh those with increasing demand. The strongest growth in new buyer enquiries was seen in Northern Ireland and the South West (+34 and +22 net balances respectively), and on a bright note for London, buyer interest has been increasing modestly over the last four months (+9 net balance in March).
New instructions to sell fell noticeably with 30% more respondents seeing a fall in fresh listing rather than a rise over the month. Stock on estate agents books has consequently dipped with branches (on average) now holding only 48 unsold properties.
Consequently, there has been an impact on sales activity across the region with transaction volumes failing to rise across the region in each of the last four surveys. In March, 5% more respondents saw a fall in agreed sales rather than a rise. That said, sales did rise relatively firmly in Wales, Scotland and Northern Ireland. Going forward the national near term sales outlook also appears somewhat upbeat, (-5% to +22% in March).
The lack of supply in the market continues to underpin prices, with 43% more respondents seeing a rise over the last month across the UK. However, the difference between Central London and the rest of the UK continues to widen. If figures from the capital are excluded from the headline figure, price growth in the UK has accelerated since December, and price rises in the North West particularly strong.
Prices in Central London have progressively deteriorated and at -49%, the net balance was the weakest since 2009. Nevertheless, 14% more respondents from London anticipate prices will be higher in twelve months’ time.
Further ahead, sales expectations over the next 12 months were reduced with 36% more respondents predicting a rise – down from +56% in February. Moreover, expectations for year ahead sales growth were reduced in eight of the twelve UK regions/countries covered.
In the West Midlands’ lettings market, tenant demand continued to rise as 15% more respondents noted an increase (rather than a fall) on a non-seasonally adjusted basis. Even so, demand growth remains more modest than in March 2016. New landlord instructions also remain in negative territory for a third straight month and the imbalance between supply and demand continues to drive rents upwards. Contributors anticipate further growth in rents in virtually all areas over the next twelve months with the exception of the capital, where rents are anticipated to continue to decline over the near term.
Simon Rubinsohn, RICS Chief Economist, commented: “The latest results for the RICS survey show little change in the underlying picture surrounding both sales and markets. High end sale properties in Central London remain under pressure, while the wider residential market continues to be underpinned by a lack of stock. This includes rents, with rents away from the capital generally moving higher as demand outstrips supply.
“For the time being it is hard to see any major impetus for change in the market, something also being reflected in the flat trend in transaction levels.”
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