Improved political outlook boosts housing market - RICS
Greater political clarity following December’s general election has helped boost sentiment across the UK’s property market, a key survey showed on Thursday.
According to the RICS UK Residential Market Survey for December, sales expectations for the next 12 months rose to a net balance of +66%, compared to +35% in November.
The survey also reported +17% more respondents saw a rise rather than a fall in enquiries from new buyers, compared to -5% in November, while the number of agreed sales edged up to +9%, the first positive number since May.
Regarding house prices, the survey’s headline net balance came in at -2%, compared to -11% previously, which RICS said signalled a "broadly flat national trend". Looking further ahead, however, and near-term price expectations were revised higher in all parts of the UK.
RICS chief economist Simon Rubinsohn said: "The signals from the latest survey provides further evidence that the housing market is seeing some benefit from the greater clarity provided by the decisive election outcome.
"Whether the improvement in sentiment can be sustained remains to be seen, given that there is so much work to be done over the course of this year in determining the nature of the eventual Brexit deal. However, the sales expectations indicators clearly point to the prospect of more upbeat trend in transactions emerging with potential purchases being more comfortable in following through on initial enquiries."
However, the survey did also sound a note of caution, with RICS warning that the change in activity levels was expected to lead to house price rises in the near and longer term, "due to continued imbalance supply".
Rubinsohn added: "The ongoing lack of stock on the market remains a potential drag on a meaningful uplift in activity, although the very modest increase in new instructions in December is an early hopeful sign. Given that affordability remains a key issues in many parts of the country, the shift in the mood music on prices is a concern, with even London expectations pointing to a reversal of course both over the coming months and looking further out."
RICS surveyed 700 branches and received 442 responses. The survey was carried out after the general election on 12 December.