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increased new instructions failed to offset more gloom

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Thu 12 Jul 2018

increased new instructions failed to offset more gloom

A second successive month of increased new instructions failed to offset more gloom from estate agents in the latest RICS Residential Market Survey.

Today’s report for  June shows 10% more surveyors reported an increase rather than a decrease in instructions, becoming the first time since early 2016 that this figure has been positive for two consecutive months.

Despite this, surveyors are still cautious, with the 12-month outlook for sales increasing rather than decreasing at zero, the lowest figure since October 2016.

The proportion of those seeing an increase in newly agreed sales also fell for the 16th  successive month, with 7% more reporting a fall in agreed sales.

The body warns there are very few signs of improvement in the housing market, especially with the figure for new buyer enquiries stuck at zero.

The RICS said the “uninspiring picture” had caused a rise in the time it is taking to complete a property sale from initial listing. This has edged up from around 16 weeks in spring of last year to 18 weeks on average at present.

Looking at the lettings data, new instructions coming through to agents dropped for the 21st consecutive month with 22% more reporting a drop rather than a rise.

Anecdotal remarks drew attention to role the change in tax treatment on investment property has played in driving this trend.

Simon Rubinsohn, chief economist for RICS, said: “It is hard to see what is going to provide much impetus for activity in the housing market in the near term.

“Meanwhile the ongoing challenges around lifting the delivery pipeline, reflected in last week’s disappointing data on housing starts, is captured in the suspicion in the survey that prices are likely to resume an upward course over the coming year.

“The challenge is also visible in the response of the private lettings market to change to the tax treatment on investment properties.

“While it is understandable that the Government wanted to provide a lift for first-time buyers, this may well come at the cost of higher rents as the appeal of buy-to-let diminishes.”