Housing market continues to stutter
Published: 11 July, 2012
UK: The UK housing market continued to stutter during June, as demand failed to pick up and supply of new property fell back, says the latest RICS UK Housing Market survey (9 July 2012).
Interest from potential buyers dropped off slightly last month, with a net balance of ten percent more chartered surveyors reporting a fall in new buyer enquiries. This was mirrored by a lacklustre level of new homes coming onto the market as new instructions fell back for the second successive month.
Overall activity has struggled to see any considerable improvement since the expiry of the stamp duty holiday back in March.
Perhaps unsurprisingly, supply and demand have both failed to turn a corner in June with newly agreed sales slowing for three consecutive months. Twelve percent more respondents across the UK reported falls rather than rises in newly agreed sales, while the average number of completed sales per surveyor* over the previous three months fell fractionally to 15.5.
House prices across the UK continued to fall last month, with 22 per cent more surveyors reporting price falls rather than rises, the weakest reading since October 2011. Regionally, London was once again the only part of the country to report rising prices, although the pace of increase has slowed significantly since the start of the year.
Looking ahead, expectations for future house prices showed little change as a net balance of 19 percent more surveyors expect prices to continue to fall. In spite of this, however, there is considerably more optimism surrounding transaction levels, with eleven percent more respondents predicting sales to increase rather than decrease over the coming three months.
Simon Rubinsohn, RICS Chief Economist, commented: “The housing market didn’t manage to turn a corner last month and activity remained in the doldrums. Fewer vendors looked to test the market and levels of buyer interest seem to have fallen back since the expiry of the stamp duty deadline earlier in the year.
“Although there is some positivity that the amount of sales going through is going to see an increase, it is unlikely that we will see any real movement until purchasing a property is more affordable and accessible for the likes of first time buyers.”