UK Housing Market Reports Show Momentum

This week has brought us two more UK housing market reports that the strong momentum is continuing. The August 2020 RICS UK Residential Survey results came out this week confirming that there is still a strong property market, albeit respondents were more cautious for the longer term.  The RICS Residential Market Survey is a monthly sentiment survey of UK Chartered Surveyors who operate in the residential sales and lettings markets.

The RICS report that the pandemic is expected to cause a shift in the desirability of certain property characteristics with 83% of respondents anticipating demand increasing for homes with gardens over the next two years.

The slip side of their expectations suggest that “net balances of -62% and -75% expect demand to decline for homes located in highly urban areas and tower blocks respectively.  Looking at the aggregate trend in new buyer enquiries over the latest survey period, a net balance of 63% of contributors reported an increase in buyer interest during August.”

With new enquiries still strong the number of new properties coming onto the market was also up with the RICS reporting a headline net balance of +46% of survey participants noting an increase.  “Even so, given the strong sales activity of recent months, the average number of homes currently held on estate agents books remains relatively low in a historical context” they say.

This strong growth was also noted in agreed sales was cited for a third successive month, with a net balance of +61% of contributors seeing a pick-up (+58% previously).

The RICS respondents near term sales expectations remain modestly positive, posting a net balance reading of +21% in August, compared to +26% in July.  However, the indicator capturing twelve-month sales projections is still in negative territory, with the net balance coming in at -17% (down from -10% last time).

The Halifax House Price Index is another of the UK housing market reports that also reported a rebound in prices with record highs.  Their statistics for August report a +1.6% change in prices, a +5.2% annual change and average prices at £245,747 (tipping £245,000 for the first time).  As with the RICS report, the Halifax also note that “Uncertainty remains with likely greater downward pressure on prices in the medium term.”

UK Housing Market Reports more tempered for the longer term

Russell Galley, Managing Director, Halifax, said: “A surge in market activity has driven up house prices through the post-lockdown summer period, fuelled by the release of pent-up demand, a strong desire amongst some buyers to move to bigger properties, and of course the temporary cut to stamp duty.”

“Notwithstanding the various positive factors supporting the market in the short-term, it remains highly unlikely that this level of price inflation will be sustained.  The macroeconomic picture in the UK should become clearer over the next few months as various Government support measures come to an end, and the true scale of the impact of the pandemic on the labour market becomes apparent.”

“Rising house prices contrast with the adverse impact of the pandemic on household earnings and with most economic commentators believing that unemployment will continue to rise, we do expect greater downward pressure on house prices in the medium-term.”

You can read the full feedback and data for these UK housing market reports by following the links above and we’ll continue to highlight news for you as it comes in.

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