House sales continue but stamp duty deadline to weigh on activity – RICS

Sales activity is continuing to rise across the housing market but the latest lockdown restrictions and the end of the stamp duty holiday are to weigh on activity going forward, according to new RICS research.

The latest RICS Residential Survey indicated that homebuyers are still searching for new properties with +15% of survey participants seeing an increase in new buyer enquiries during December.

The number of new properties being listed for sale also picked up over December, with a net balance of +7% of respondents reporting an increase.

Furthermore, house prices have continued to increase according to the RICS report, with a net balance of +65% of respondents citing a rise. The national net balance has now remained between +61% and +65% over the last four months, meaning there is significant upward pressure on house prices across the UK, RICS stated.

However, near-term sales expectations slipped further to post a net balance of -22% across the UK and is the weakest since April 2020, which RICS linked to the renewed pressures induced by the pandemic in recent weeks. Looking towards the next 12 months, the report showed that sales expectations are only marginally negative, posting a net balance of -6%.

RICS chief economist, Simon Rubinsohn, commented: “Although the housing market remains open for business in the midst of the latest national lockdown, there is a sense from respondents to the survey that the new restrictions will still impact on transaction activity over the coming months.

“This is most visible in the negative reading for sales expectations over the next three months when typically, with the expiry of the stamp duty holiday approaching, this series would be expected to remain firmly in positive territory.

“Looking beyond this immediate time horizon, the feedback from RICS members is that the uplift in prices over the past year will be sustained, for good or ill, as the macro picture gradually improves on the back of the rollout of the COVID vaccination programme. More significantly, private rents are envisaged to outpace price gain as supply continues to fall short of demand with anecdotal reports of landlords exiting the market.”

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