THE market for buying homes in the North West is getting weaker, according to RICS, with little expectation that sales will pick up in the coming three months.
In the organisation’s latest monthly Residential Market Survey, just 1% of agents in the region expect sales activity over the next three months to rise.
Meanwhile, it says sales expectations have weakened in almost all parts of the UK over the past two months, with Brexit uncertainty unsurprisingly a significant factor causing the hesitation in buyers and sellers.
However, in August 31% of agents in the North West reported a rise in demand from new buyers (up from 9% in July) yet more respondents reported a fall in newly agreed sales last month.
What’s more, 14% of agents in the region reported a rise in new instructions to sell during the month of August, yet RICS said this is still not enough fresh listings to cope with rising demand and dwindling stock levels.
When it comes to prices, 12% of agents in the region reported a rise in house prices last month (down from 13% in July) but more expect to see prices fall over the coming year.
In the lettings market, RICS said the August results show that 50% of respondents reported a rise in tenant demand (non-seasonally adjusted figures) up from 2%, yet a modest 11% reported an increase in landlord instructions. Given the consistent imbalance between rising demand and falling supply, 36% of respondents expect to see rents pushed higher over the next three months.
“Uncertainty is a theme that respondents continue to highlight as a negative influence on sentiment in survey after survey,” said Simon Rubinsohn, RICS’ chief economist. “That said, the key RICS activity indicators have remained relatively resilient until now, pointing to only a modest dip in sales transactions rather than anything more severe.
“More ominously, the August RICS results again draw attention to the challenge in the lettings market, with feedback continuing to indicate that demand is outstripping supply. As a result, the pressure is for rents to continue moving higher and indeed outstripping any price gains both in the near and medium term.”
Hew Edgar, RICS’ head of UK government relations and City added: “The ever-changing policy landscape is damaging confidence in the lettings market. But the private rented sector (PRS) has the enormous potential to deliver more homes that are urgently needed, and to contribute to the alleviation of the affordability issues which are being exacerbated by the ongoing dearth of supply across all tenures.
“The need for the regulation of property agents – including those operating in the PRS – is critical in order to make the sector more attractive to landlords, and of equal importance, enhance the landlord-tenant relationship. To assist this recommended regulation, we are working with industry to develop an approved PRS Code of Practice. We have also worked with Lord Best as part of his Regulation of Property Agents (ROPA) working group, to help bring positive change and increase public confidence in the sector; parts of which have been likened to the ‘wild west’.”