Buyer demand climbs as house prices return to stability – RICS

Buyer demand in the UK housing market climbed in March, the latest RICS UK Residential Survey has indicated.

According to the survey, a net balance of +8% of respondents cited an increase in new buyer enquiries during March – the most positive result since February 2022.

In terms of property supply, RICS reported that the flow of new listings coming onto the sales market increased for a fourth successive month, with a net balance of +13% of respondents noticing a pick-up in new instructions in March.

The survey suggested that house price trends have grown less negative for the seventh month in a row, rising from a net balance of -67% in September last year to -4% in March. RICS said this suggests a “stable picture” is now in place for house prices across the UK.

Senior economist at RICS, Tarrant Parsons, said: “Demand continues to recover gradually across the UK housing market, with new buyer enquiries rising for a third month in succession according to the latest survey feedback.

“With the inflation backdrop turning a little less difficult of late, this has led to expectations that the Bank of England will be able to start lowering interest rates later in the year. This should continue to support the market to a certain degree going forward.”

In terms of expectations for the housing market in the months ahead, respondents to the RICS survey have predicted further improvement in activity over the coming months, with a net balance of +13% of respondents predicting sales volumes rising in the next three months, compared to a reading of +6% previously.

Similarly, looking ahead to the next 12 months, a net balance of +46% of respondents predicted sales activity rising, up from +42% in February.

“In keeping with this, near-term sales expectations point to an improving outlook, albeit the scope for an acceleration in activity will still be relatively limited given mortgage rates are set to remain much higher than in 2020/21.”

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