Chartered surveyors reported that demand from potential buyers held relatively firm during July, despite the poor summer weather, while the amount of new homes coming onto the market continued to fall.
The latest RICS UK housing market survey found that 5% more chartered surveyors reported falls rather than rises in demand last month (from -10%). Despite the poor weather seen across many parts of the country, it seems that many potential buyers were not deterred.
However, the amount of new properties coming onto the market continued to drop off during July, as fewer sellers looked to test the summer market. A net balance of 15% more chartered surveyors reported falling supply.
This imbalance between demand and supply, which is being compounded by the ongoing difficulties many buyers are experiencing with mortgage finance, resulted in a drop in transactions. The average number of completed sales per surveyor* during July was 15.1. Despite the introduction of the government’s NewBuy initiative, activity has continued to fall away after a stronger start to the year.
Elsewhere, prices across the UK continued to edge lower last month. 24% more surveyors reported falls rather than rises in prices. This reading has now been in negative territory for two years. Respondents note that a general lack of consumer confidence continues to weigh heavy on the market.
Surveyors are cautiously optimistic that transaction levels should improve over the coming three months, with a net balance of 14% more respondents predicting rises in activity. However, unsurprisingly, a more pessimistic outlook exists for future prices, as 23% more surveyors expect prices to content falling rather than rise.
“Despite the terrible weather seen in many parts of the county last month, a steady number of potential buyers still got out there to test the market,” said Peter Bolton King, RICS global residential director.
“However, this didn’t result in a higher level of actual transactions. Fewer sellers are putting their homes up for sale and the ongoing problem of accessing affordable finance is not helping. If vendors want to sell their homes quickly, they will have to be realistic in their price expectations.”
