The housing market lockdown has seen the lowest near-term sales expectations since 1998, results from the latest RICS UK Residential Market Survey revealed.

The survey found the opening months of 2020 had shown a marked pick-up in the housing market, but that the next month will have a “significant” impact on the outlook for the rest of the year.

For March, the RICS data showed that after three successive months of increasing buyer enquiries, a net balance of -74% of UK respondents had reported a fall in buyer demand – a sharp fall from +17% previously.

RICS also reported that the month saw newly agreed sales drop across all parts of the UK, with 69% more respondents reporting a fall – down from 19% reporting a rise in February.
 
Looking ahead, RICS also suggested sales expectations for the next three months had turned “deeply negative” following the lockdown measures, with a net balance of -92% of respondents representing the lowest reading since sales expectations were first recorded in the RICS Residential Market Survey, 22 years ago.

Respondents were slightly less negative about the next 12 months, although 42% still expected sales to fall further, rather than rise.
 
RICS chief economist, Simon Rubinsohn, suggested the latest results “capture the period” during which the economy moved into lockdown, so show a “somewhat mixed” picture.

“Critically, the key forward looking indicators clearly reflect the emergency measures in place,” Robinson commented.

“The fact that responses are negative not just at the three but also the twelve month time horizon is significant in suggesting that the legacy of Covid-19 could be such that any return to what might be described as ‘normality’ in the economy will take time and households will remain cautious for a while.
 
“Of course, the primary focus of government is at this stage the health of the nation and defeating coronavirus, and it may be a little premature to be planning for the economic recovery. However, the feedback from the survey does imply that further government interventions both in the wider economy and more specifically in the housing market may be necessary to aid this process supporting businesses and people back into work.”
 
RICS head of government relations, Hew Edgar, added: “While the UK’s health is the priority, our survey feedback suggests that the Government will need to start considering medium and long-term measures that could assist a post-pandemic housing market.
 
“These are exceptional circumstances and the Government will need to consider all avenues that could feasibly rebuild confidence, bridging the gap between uncertainty and recovery.
 
“RICS is not an organisation that would call for a stamp duty holiday on a whim, and indeed our view prior to Covid-19 was that it required a full-scale review. As we start to emerge from this crisis, however, it is likely that the finances of potential homebuyers will be under strain, and the burden of stamp duty could put buyers off.

“For those who can afford to move they may lack confidence in the market, adding to the slow down.  A stamp duty holiday could be one of the ways to reactivate the housing market quickly as a short term measure.” 

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