U.K. Housing Momentum Ebbs as Buyer Interest and Sales Wane

Stagnant demand and slowing momentum will create a flat summer property market, says Rics

Sales decline as stock dwindles

The housing market was stagnant in April, with national near-term sales expectations pointing to a flat picture over the summer, according to the latest survey from the Royal Institution of Chartered Surveyors.

However, there are predictions that all parts of the United Kingdom will see a growth in house prices over the next 12 months.

Some parts of London appear to have been hit particularly hard, with estate agents and developers resorting to offering free cars and other incentives to try to tempt buyers.

A survey of over 600 estate agency branches across the United Kingdom found the average number of properties was hovering close to record lows.

Whilst we are seeing evidence of more houses being put on the market, we are also seeing an increasing number of potential buyers active.

Some 15 per cent more respondents saw new instructions drop in April, while new buyer enquiries were unchanged nationally, having failed to see any meaningful growth since November 2016.

"Average properties on estate agents books continue to hover close to record lows, while the headline indicator on new sales instructions remained negative for a fourteenth month in a row".

Rics' main house price index - which measures how widespread price rises have been over the past three months - held at +22 in April, unchanged from March which was the lowest reading since September. This finding follows a recent claim from a leading property-finding firm that the once super-heated central London market had turned into a "burnt-out core". This was "underpinned by the lack of stock", the surveyors' analysis showed.

Uncertainty around the snap general election and ramifications of stamp duty changes are factors hampering activity and creating a lack of choice, the report says.

Looking ahead at the national picture for near term price expectations, these have eased slightly with the net balance moderating to +4% (from +11%) suggesting that house price inflation is anticipated to slow in the three months ahead. Lawrence Hall, a spokesman for the website, said: "With the upcoming general election, it's perhaps no surprise that people may be holding out to make a purchase or sale decision until after 8 June".

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