UK Residential Market Survey Says Market Halted!

Just a few weeks ago we were enjoying headlines reflecting rising house prices, the ‘Boris bounce’ and general positivity; but no more according to the latest RICS UK Residential Market Survey.

“Housing market halted by Coronavirus” is now the headline from the March 2020 RICS UK Residential Market Survey and reports a dramatic turnaround in sentiment.  According to the survey, with estate agents being forced to close, positive expectations have fallen dramatically and the new year house price gains have quickly turned negative.

The government has required all estate agents to close as part of the strategy to combat the spread of the virus and, naturally, viewings have been frozen.  According to the RICS UK Residential Market Survey says that “in terms of new buyer demand, a run of three successive monthly increases was brought to an abrupt end, with a net balance of -74% of respondents across the UK as a whole reporting a fall in enquiries during March.  Likewise, the uptick in sales volumes that had been seen since December 2019 went into reverse, evidenced by a headline net balance of -69% of survey participants noting a decline over the month.  Unsurprisingly, sales fell across all parts of the UK when compared with February.

Needless to say, the RICS UK Residential Market Survey reflects deeply negative expectations of near-term sales following the lockdown measures.  At the twelve month horizon, sales expectations are a little less downbeat, albeit a still sizeable net balance of -42% of contributors expect sales to be down over the year ahead.

The survey’s indicator on prices (reflecting data from the past three months) remained slightly positive in the latest results.  A net balance of +11% of contributors saw prices increase in the three months to March, albeit this reading has eased from +29% in February.

Medium term more resilient – RICS UK Residential Market Survey

The report does note that sentiment on the medium term outlook for prices has proved a lot more resilient. Respondents currently expect price growth to average just over 2.5%, per annum, over the next five years.  This remains closely aligned with the average five-year house price inflation projections seen over the past twelve months.

We await with interest what news the next monthly housing market reports will bring us!

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