The momentum in the UK housing market continues to slow, as buyer demand falls for the twelfth consecutive month.
The latest Residential Market Survey from the Royal Institution of Chartered Surveyors (Rics) showed interest from would be buyers continued to diminish, with 17 per cent more respondents seeing a fall rather than rise in March.
This subdued trend, which has been registered for a year now, is also seen in other key indicators, since both new instructions and newly agreed sales remain in negative territory.
According to the Rics survey, one of the main factors impeding demand alongside the ongoing concerns over affordability, is the lack of fresh housing stock coming onto the market.
In March, the flow of properties slowed once again, marking the seventh consecutive month respondents reported a fall in the number of houses being put up for sale. As such, average stock levels on estate agents’ books remains near an all-time low.
Sales also continued to fall in March, with 20 per cent more respondents reporting a fall rather than rise, the survey showed.
At a regional scale, respondents in virtually all parts of the UK noted either a flat or downward sales trend last month.
The year ahead picture does look more positive, however, with 17 per cent of respondents anticipating an increase in sales over the next year at the national level.
House prices are expected to fall in London and the south east, and remain flat elsewhere in the UK.
Northern Ireland, Wales and the East Midlands seeing the strongest readings for higher prices.
Survey respondents were also asked whether they had seen an increase in the number of sellers withdrawing their property for sale from the market, when compared with a year earlier.
While there was no change in national levels, in London, 55 per cent of respondents reported a rise in the number of properties being withdrawn from the market, when compared to the same period last year.
According to Simon Rubinsohn, Rics chief economist, the survey results “provide little encouragement that the drop-in housing market activity is likely to be reversed anytime soon”.
He said: “Apart from the implications this has for the market itself, it also has the potential to impact the wider economy contributing to a softer trend in household spending.
“This could make Bank of England deliberations around a May hike in interest rates, which is pretty much odds-on at the moment, a little more finely balanced than would otherwise be the case.
“The downshift in sales for the time being continues to be more visible in London and the South East with many other parts of the country continuing to show rather greater resilience. Feedback on expectations regarding transactions suggest this divergence will persist over the coming months.”
maria.espadinha@ft.com
