The latest RICS market survey shows that buyer enquiries and transactions slipped back last month with expectations pointing to “a subdued near term outlook for both prices and sales.”
in September, 20 per cent more members of the Royal Institution of Chartered Surveyors who responded to the organisation’s survey reported a fall rather than rise in demand from would-be buyers, extending the run of negative readings into a sixth month.
Alongside this, 15 per cent more respondents reported a fall in agreed sales rather than a rise which is the lowest since July 2016.
RICS says that when broken down regionally, London and the South East were at the forefront of the decline in sales, but weakness in transactions was widespread during September. Only Wales and the South West were cited to have seen an increase in sales, while all other parts of the UK saw sales flat.
Looking ahead over the next three months, there is little change anticipated in national sales activity, says the institution.
As sales and new buyers decline, new instructions to sell were roughly stable for the second report running, having declined continuously for the past 18 months. Consequently, average stock levels on estate agents books held broadly steady - albeit near record lows - at 43.3.
Prices also held steady in September at the national level, with six per cent more respondents seeing a rise in prices demonstrating a marginal increase. Across the regions, London remains firmly negative, while the price balance in the South East also remains negative - but to a lesser extent than London - for a fourth consecutive month.
Both of these regions continue to display the highest proportion of respondents viewing the market to be overpriced, compared to all other parts of the UK.
“The stark divergence in key readings from the latest survey demonstrates in the clearest possible terms just how important the regional narrative is at the present time” says Simon Rubinsohn, RICS chief economist.
“In part, this is a reflection of affordability constraints hitting the higher priced segments of the market. It is perhaps also indicative of a shift in economic momentum in the face of the increasing possibility of the first hike in base rates in over 10 years” he adds.
“That said, we are continuing to see evidence of shortage of stock both in the new build and second hand market. And despite the announcements at the recent Conservative Party conference, it is hard to envisage this changing any time soon.”