RICS: Property professionals are becoming ‘cautiously’ positive

Agents and surveyors are at their most positive about the housing market for the first time since January 2022.

The November 2023 RICS UK Residential Survey results point to an improved outlook for the housing market, with the improvement in sentiment supported by a small easing in mortgage rates over recent weeks. 

Near-term sales expectations over the next three months improved with the first positive net balance reading since early 2022 of +6%.

At the twelve-month time horizon sales expectations are much more positive with a net balance of +24% of respondents foreseeing an improvement in sales activity, marking the most upbeat return for this forward-looking measure since January 2022.

However, other indicators remain in negative territory.

At the UK level, the net balance reading for new buyer enquiries came in at -14% in November. 

While this signals buyer demand is still falling, it is the least negative figure since April 2022, RICS said.

When viewed at a regional level, feedback is mixed regarding new buyer enquiries, with positive readings in both the North West, and Northern Ireland. London’s new buyer enquiries have turned less negative from -12 from -31, as have other areas such as Wales at -9 from -57, however Yorkshire and Humber and the North have seen further falls, according to the report.

For agreed sales, the latest national net balance of -11% compares with a reading of -23% in October and suggests the downward trend in sales volumes is easing, the RICS said.

East Anglia, the North West, and Northern Ireland are all seeing positive figures.

House price sentiment has also turned less negative with a net balance of -43% in November. While this continues to signal a fall in house prices, this sentiment has improved over the past three months, the report suggests.

Simon Rubinsohn, chief economist at RICS, 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 buyers enquiries 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.”