Demand and sales stabilise as 'steadier' housing trend emerges: RICS

Both new buyer enquiries and agreed sales stabilise following recent declines, although prices continue to fall in some areas, with London and the South East in particular showing further weakness.

Near term indicators remained flat for both sales and prices on a national level, but twelve month expectations point to a modest pick-up.

Virtually all areas of the UK exhibit comfortably positive twelve month price expectations, led by the strongest sentiment in Scotland and the North West of England.

Survey feedback suggests it is the upper and middle priced tiers of the market that are proving the most challenging, with 69% of contributors reporting that sales prices are coming in below asking price for properties valued at above £1m.

This weakness also seems to be spreading across the price category below, with 74% of respondents noting sales prices coming in lower than asking for properties listed at between £1m and £500,000, up from 56% in January.

Conversely, a majority of contributes (59%) noted that sales prices were either at the same level or slightly above asking prices for properties marketed at £500,000 or less.

Turning to trends in activity, new buyer enquiries were more or less unchanged during April, following a sequence of four straight months in which they had declined fairly sharply. That said, although demand was not reported to have declined in the latest results, it has now been thirteen consecutive months since this indicator was last positive.

As with buyer demand, agreed sales also held relatively steady over the month, having fallen back noticeably for a number of reports. The regional picture still remains varied however, with sales only rising (to any meaningful extent) in four of the twelve regions/countries covered by the survey.

Interestingly, London was one of those four areas, where a net balance of +10% of contributors cited an increase - the first positive reading in over twelve months.

Brian Murphy, head of lending for Mortgage Advice Bureau, commented: "Following on from reports earlier this week that the average house price had cooled last month, it’s not a huge surprise to find that the opinion amongst RICS members points to the market cooling last month, not just in areas that were already seeing values recede, such as London and the South East, but in the South West which previously had seen significant increases.

"Whether this is, understandably, the outcome of surveyors who are operating on a far more circumspect basis in areas where prices have risen quickly over the last few months potentially leading to down-valuations isn’t specifically mentioned in this latest report, but might perhaps be a contributing factor.

"It's also interesting to note that the report clearly suggests that the middle and upper levels of the market are seeing asking prices not being achieved in many areas, both in the super-prime multi-million league, but also in the £500,000 to million category – which is, realistically, the cost of a family home in many areas of the South East and London. This is potentially a combination of mortgage affordability and the cost of SDLT in the ‘middle tier’, both of which are proving challenging for those wishing to move up the ladder.

"Elsewhere, the survey findings point to the fact that whilst buyer demand has remained consistent, the ongoing lack of available properties is still at near all-time record lows. In practical terms, this translates into less buyer choice, and those who want to purchase taking longer to find what they are looking for. Whilst this trend continues, although it may not be great news for estate agents who were relying on a seasonal ‘Spring surge’ to boost their income but it does at least suggest that buyers are still very much out there and consumer confidence in property is still evident, which in the longer term is not the worst place for the UK property market to find itself in given current ongoing political uncertainty.”