The September 2019 RICS UK Residential Market Survey for the West Midlands shows buyer demand and supply has slipped into negative territory.
The market seems unlikely to gain impetus over the next three months, though sentiment for a year ahead is a little more resilient, the survey shows.
In September, the West Midlands reported a notable decline in the number of new homes coming on to the regional housing market, with the West Midlands seeing the lowest number of new properties across the UK.
Comments from contributors are suggesting that the Brexit impasse is dissuading sellers leading to the new instructions net balance falling to minus 57 per cent in September.
Unsurprisingly, average stock levels on estate agents’ books, remain near record lows. As contributors are reporting that appraisals are down compared to a year earlier, there is little prospect of a pick-up in the immediate future.
Alongside a drop in the number of people looking to sell their home, buyers continue to take a cautious approach. The new buyer enquiries net balance fell to minus 25 per cent in the West Midlands in September, and the number of newly agreed sales fell too, with a net balance of minus 41 per cent, as activity slips across the region.
Whilst house prices fall in at the national level, mainly driven by London and the south east, house prices in the West Midlands continue to rise.
Looking ahead, respondents are cautious about what the next three months will do to house prices but remain more optimistic for the year ahead with plus eight per cent expecting prices to rise.
Simon Rubinsohn, RICS chief economist, said: “There are good reasons for thinking the latest dip in both buyer enquiries and vendor instructions is a cautious response to the endless wrangling about Brexit, as the October 31 deadline approaches.
“Indeed, much of the commentary from respondents based further away from London and the south east remains relatively sanguine, which is also reflected in some of the metrics capturing expectations.
“However, unless there is a speedy resolution to the ongoing impasse it does seem inevitable that the stand off between purchasers and sellers will deepen making it harder to complete transactions. This will not only be a direct hit on the housing market itself but could have ramifications for the wider economy as the normal spend on furniture, fittings and appliances that typically accompanies a house move is also put on hold.”