Near term sales expectations in the UK residential market have slipped deeper into negative territory.

According to the August 2018 RICS Residential Market Survey, Brexit uncertainty is again highlighted as a significant factor causing hesitation among buyers and vendors. The near term sales expectations net balance fell from -4% to -23%, representing the poorest return since February this year.

On a UK-wide basis, the Newly Agreed Sales series inched slightly further into negative territory with a net balance of -8% compared to -6% previously. East Midlands and the South West regions displayed the weakest momentum over the survey period.

Regarding the near term outlook for prices, expectations are negative at the national level, with a net balance of -24% of survey participants anticipating a decline over the coming three months (down from -13% last time out).

In the lettings market, the August results show tenant demand increased for an eighth month in succession, as a net balance of +23% of contributors cited a pickup (non-seasonally adjusted figures). Set against this, landlord instructions remain in decline, an ongoing trend stretching all the way back to 2016. Given the consistent imbalance between rising demand and falling supply, rents are seen being squeezed higher over the next three months. In fact, near term rental expectations are now positive, to a greater or lesser degree, across all parts of the UK.

OneSavings Bank sales director Adrian Moloney said: “With no mention of housing in the new Chancellor’s spending review last week, prospective buyers remain unaware of what impact this new government will have on the housing industry in the long term. The extension of uncertainty around the UK’s exit from the European Union is an unwanted, unhelpful drag on the market. At this time, activity is being driven by a number of buyers who refuse to wait any longer.

“Many first-time buyers remain isolated from the market and unable to raise the necessary deposit for their first home. To help boost activity in the long term the government must commit to increasing housing supply. Only with a rise in affordable and quality housing will we see the market recover and home ownership begin to rise again.”

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