AS the new government beds in, the results from the RICS Residential Market Survey July 2019 shows chartered surveyors in the East Midlands expect prices and sales activity to fall in the coming three months across the region.
As the new government seems to be concentrating on increasing home ownership, the continued issue of supply failing to keep up with the demand for rental properties in the East Midlands seems likely to squeeze rents higher. At the headline level (quarterly seasonally adjusted data) demand for properties across the region picked-up once again, however, only seven per cent of respondents reported a rise in landlord instructions, resulting in 19 per cent of agents expecting to see rents rise over the coming three-months.
In more positive news, 11 per cent more respondents saw a rise rather than fall in enquiries from new buyers in July. While interest from would-be buyers seems to be picking up, 30 per cent of respondents reported that newly agreed sales fell last month. Indeed, the national net balance slipped to minus six per cent, from plus three per cent in June.
Looking at the coming three months, respondents in the region don’t expect much to change, as the near term predicted sales net balance slips to minus 30 per cent (down from plus three per cent in June). However, looking further out, sales activity is expected to rise across the East Midlands for the year ahead.
Just as sales activity slipped in July, more respondents saw a fall in the number of new properties being listed for sale, in a trend dating back to February 2018.
Looking at the region’s house prices, respondents to the latest survey saw little change over the last month, with expectations for the coming three months falling once again.
Simon Rubinsohn, RICS Chief Economist, said: “The latest RICS results will provide little comfort for the market with all the key indicators pretty much flatlining. Indeed, the forward-looking metrics on prices and sales also seem to be losing momentum as concerns, clearly voiced in the anecdotal feedback, both about Brexit and political uncertainty heighten. Some support may be provided by an easing in the cost of money which could feed through into lower mortgage finance costs, but this may be insufficient to provide a spur to lift activity given the clouds hanging over the economy.
“Meanwhile, the lettings market data continues to send a very strong message that institutions need to upscale their build to rent pipeline to address the shortfall resulting from the decline in appetite from buy to let investors. It is significant that the near-term rental expectations indicator has climbed to a three-year high.”
