Surveyors’ sales expectations turn positive for next few months

A downward trend in house sales and new home buyer inquiries appears to be easing, according to surveyors.

A net balance of 14% of property professionals reported new buyer inquiries falling rather than rising in November, the Royal Institution of Chartered Surveyors (Rics) said.

While this signals that buyer demand is continuing to fall, it is the least negative figure since April 2022.

Across the UK, feedback is mixed regarding new buyer inquiries, with inquiries on the increase in the North West of England and Northern Ireland, the report said.

Across the survey, a net balance of 11% of property professionals reported sales falling rather than rising in November, slowing from a balance of 23% who reported this in October.

Rics said this suggests the downward trend in sales volumes is easing, with East Anglia, the North West of England and Northern Ireland all recording positive sales figures.

Looking ahead, professionals’ sales expectations for the next three months improved, with a balance of 6% expecting to see a rise rather than a fall in transactions, marking the first positive reading since early 2022.

The report said: “Nevertheless, with this figure being only marginally positive, the expected recovery in sales volumes over the coming three months is relatively modest.”

A net balance of 24% of surveyors expect sales to be higher in a year’s time – marking the most upbeat reading on this measure since January 2022.

The survey also pointed to house prices continuing to fall, although Rics said sentiment has improved over the past three months.

The report said: “Disaggregating the data shows that the vast majority of regions have seen the pace of house price declines ease to some degree (in net balance terms), although the South East and East Midlands continue to return deeply negative readings.

“Bucking the broader trend entirely, respondents have cited a clear upward move in house prices across Northern Ireland in recent months.”

In the lettings market, tenant demand continues to rise, although the survey results suggest the increase has eased.

In further signs of a squeeze on the supply of rental homes, instructions from landlords are continuing to decline, Rics said, and rents are projected to rise by close to 4% over the next year, Rics said.

Rics chief economist Simon Rubinsohn said: “The latest Rics residential market survey provides further evidence that sentiment is a little less negative than previously was the case with, critically, the new buyer inquiries indicator finally beginning to stabilise.

“This is being aided by increased confidence that the interest rate cycle has peaked, which is reflected in somewhat more competitive mortgage products coming to the market.

“However, with the cost of money likely to remain elevated for some time to come and the economic outlook still downbeat, it is not surprising that the overall tone to the anecdotal remarks from survey respondents is still quite cautious.”