The UK housing market remained subdued in May, although there are signs that recent deterioration may be beginning to stabilise, according to the latest data from RICS.
The latest UK Residential Market Survey, compiled on monthly sentiment of chartered surveyors, showed that new buyer enquiries recorded a net balance (the proportion of respondents reporting a rise in prices minus those reporting a fall) of -34% in May, unchanged from the previous month. While RICS says that this continues to point to weaker demand, it marks the first time since January where enquiries have not fallen further.
The survey saw agreed sales remained unchanged, with a net balance of -37%. RICS says that, although this shows that more respondents are still seeing sales fall rather than rise, the unchanged reading suggests the pace of decline is no longer intensifying.
RICS also found that transactions are now taking longer to complete, with the average time from listing to completion rising to 21.5 weeks, the longest since the dataset began in 2017.
According to the survey, house prices remained subdued, with the net balance staying at -35% for the second consecutive month. Respondents in the South East and East Anglia reported more pronounced downward pressure on prices, while Northern Ireland continued to see firm price growth.
RICS also reported that short-term sentiment remains cautious, although sales are expected to improve slightly, moving into “neutral territory” at +2% over the next 12 months. Participants also expect house prices to remain weaker in the near term, with a net balance of -45% expecting prices to fall over the coming three months. However, expectations for the year ahead edged into positive territory at +6%.
Tarrant Parsons, RICS head of market research and analysis, said: “The latest survey data suggest the recent downturn in activity may be beginning to stabilise, with several key indicators broadly holding steady. However, as they remain in negative territory, it would be premature to interpret this as the start of a recovery.”
“The decline in CPI inflation to 2.8% in April provided some temporary relief, but the Bank of England has signalled that further inflationary pressures are likely as higher energy costs continue to pass through. Against this backdrop, the prospect of further rate rises cannot be dismissed, and until there is greater clarity, market sentiment is likely to remain fragile.”
