However, the general sentiment from survey respondents continues to point to a stronger picture for overall sales market activity over the next 12 months
The latest RICS UK Residential Survey results shows the recent recovery in buyer demand has dropped slightly, with the market impacted by rising mortgage rates once again.
However, the general sentiment from survey respondents continues to point to a stronger picture for overall sales market activity over the next 12 months.
The headline for new buyer enquiries, in terms of net balance, declined from +6 to -1 in April, marking the end of three successive positive monthly results, suggesting a more stagnant market this time round. The regional feedback on buyer demand is mixed, with a notable loss of momentum mainly seen in London and Southern parts of England.
Looking at the number of properties available on the market, a net balance of +23 of respondents noted a rise in new instructions in April.
RICS says this represents the most positive figure since September 2020, as sellers are likely to be feeling more comfortable in listing their properties as current market conditions continue to improve following the pandemic.
The agreed sales indicator also improved marginally in April, with a net balance reading of +5 compared to -5 last month. Although this marks the most positive data since May 2021, it only shows a minimal rise in monthly sales.
Recent changes in financial markets, especially the reduction in expectations regarding how much the BoE might ease monetary policies this year, have impacted short-term sales expectations negatively. The net balance for sales expectations over the next three months declined to -1, the lowest since October 2023 which indicates a stagnant near-term outlook.
Nonetheless, respondents are still optimistic about a stronger trend in sales activity over the next twelve months, although they expect it to be slightly less robust with a net balance of +33 recorded this time, down from +46 last month.
Simon Rubinsohn, RICS’ chief economist, says: The survey demonstrates the sensitivity of the sales market to interest rates at the present time, given the continuing challenge around affordability. A modest back up in mortgage pricing has contributed to the flatlining in the buyer enquiries metric over the last month, as well as the slightly more cautious signals around near-term expectations.
He added: That said, there is still a strong perception that activity in the market will pick up in the latter part of the year and into 2025, irrespective of any political uncertainty around the general election.