THE indicators for future activity in the East Midlands housing market remain subdued, according to the February 2018 RICS UK Residential Market Survey.

Continuing a prevalent trend; new buyer enquiries, new instructions and newly-agreed sales continued to drift lower in February. New buyer enquiries fell for an fifth successive month with respondents seeing a fall rather than rise in enquiries. Meanwhile, the number of agreed sales also remains slightly negative (net balance -18 per cent), and continues a trend seen over the fifteen months.

New buyer enquiries fell once again this month, but there continues to be significant regional variations. Demand from would be buyers continued to increase in Scotland, Northern Ireland, and the South West in February yet enquiries from new buyers declined not only in the East Midlands, but London and the South East.

Alongside ongoing concerns about affordability in some areas of the region, part of the problem may lie in the lack of choice of properties to purchase with the new instructions indicator falling once again. This has pushed the average stocks (per branch) on the books of agents who respond to the survey to a new record low of 49.

Prices in the East Midlands continue to remain robust with 34 per cent more respondents reporting prices rises. The three-month price expectations paint a slightly more subdued picture with 15 per cent more respondents expecting prices to rise. In comparison, price readings were also strong in Wales, the North West and Northern Ireland. By way of contrast, feedback on prices remains negative to a greater or lesser degree in London, East Anglia, the South East and the North.

The longer five-year indicator for prices and rents in the region continues to suggest that prices will increase at a slightly slower pace than rents, although, both point to growth at the end of the five-year period.

In an additional question included in the survey, respondents were asked about the key factors driving demand for new build properties. At the national level, the main driver was the lack of stock in the second-hand market. This is followed by the appeal of the Help to Buy scheme with developer incentives and the ‘quality’ of new homes scoring lower.

Simon Rubinsohn, RICS Chief Economist said: “The consultation announced earlier this week on housing delivery put the onus squarely on developers and planning departments to up their game to lift the supply pipeline but the feedback to the latest RICS Residential Market Survey casts some doubt as to whether this will be sufficient to address the challenge. Significantly, the longer term house price indicator has begun to creep upwards once again in recent months despite the current somewhat mixed climate and the private rent series also remains firm, in both cases pointing to increases over the next five years.

“Meanwhile, the divergent regional picture is becoming increasingly pronounced with key RICS indicators across huge swathes of the country still showing considerable resilience but data for London, the South East and East Anglia rather more subdued.”