Marching ahead: Buyer demand puts spring in the step of the housing market
RICS UK Residential Survey, March 2024
Survey results predicting further bounce in housing market in both the near and longer term
New property listings increase for a fourth month with buyer demand also rising
The battle between tenant demand and lack of available rental properties continues, with rental prices expected to rise in the coming months
The latest RICS UK Residential Survey results (March 2024) show a steady improvement in sentiment, with buyer demand and sales expectations going forward seeing a rise in positivity. Meanwhile, stability in house prices has also been reported.
According to the survey, buyer demand has continued to rise, with a net balance of +8% of respondents citing an increase in new buyer enquiries during March, making this the most positive result since February 2022.
On the property supply front, 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.
Looking at expectations, respondents predict 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 twelve-months, a net balance of +46% of respondents predict sales activity rising (up from +42% in February).
Interestingly, house price trends have grown less negative for the seventh month in a row, rising from a net balance of -67% in September 2023 to -4% in March. This suggests a stable picture is now in place for house prices across the UK.
Moving across to the lettings market, the question relating to tenant demand remained modestly positive in March, at a net balance of +19 (+16 last time round). On the opposite side, landlord instructions once again show a weak net balance reading of -19. Consequently, +34% of survey respondents still expect rental prices to rise in the next three months.
Last week, the UK government’s ‘Levelling Up, Housing and Communities (LUHC) Committee’ announced the launch of an inquiry into the home buying and selling process, which will look at if the current processes are fit for purpose and what can be done to make improvements.
RICS Senior Public Affairs Officer, Sam Rees, commented: “As the activity in the housing market increases, we welcome the inquiry into how the home buying process can be improved for consumers.
“RICS members working as agents and surveyors play a vital part in providing professional advice, ensuring that consumers are well informed on what for many is the most expensive purchase they will make. Their expertise will help shape the RICS recommendations and evidence to the inquiry committee this month.
“As a founding member of the Digital Property Market Steering Group, we are already working across the sector to identify ways that consumers and industry professionals can have access to the necessary information needed to buy and sell a home, reducing fall throughs and transaction times.”
Tarrant Parsons, Senior Economist, RICS, comments:
“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 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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