Housing market ends 2024 on a firm footing: RICS

The RICS UK Residential Property Survey for December 2024 reports growing activity in the housing market with the year capped off in a generally upwards trend.

House sales continues to see an upward trend with +5% (net balance) of respondents reporting an increase in new buyer enquiries. While this is down from the +11% readings posted in November and October, sales volumes have picked up with a net balance of +7% of respondents indicating sale growth, compared to a figure of +1% in November.

New instructions, which measures properties placed for sale, saw a bounce, potentially due to stamp duty changes in March, with a net balance of +14% reported. This is the sixth consecutive month where respondents have indicated an increase in houses being listed for sale.

House prices are now rising in every region of the UK, with Northern Ireland and Scotland currently reporting the strongest price growth.

However, RICS noted that rising gilt yields present a potential challenge for the housing market over the coming months although for now, at least, respondents to the survey remain upbeat about the medium term outlook.

RICS chief economist, Simon Rubinsohn, said: "The latest results from the RICS Residential Market Survey points to a further improvement in sentiment in the housing market despite concerns about the potential impact of rising bond yields on borrowing costs. Buyer enquiries rose once again, albeit at a slower pace than in November, and the headline price indicator also moved higher.

"More significantly, the signals from the survey around expectations over the next twelve months also remain solidly positive for now. However, the resilience of the uplift in market mood could be tested if the mortgage rates do begin to climb in a material way over the coming months. That, critically, would also be a concern for developers who will want to see a solid market as a backdrop for ramping up housebuilding to help meet the government’s ambitious 1.5 million homes target for this parliament.”

Jeremy Leaf, north London estate agent and former RICS residential chairman, commented: “As far as sales are concerned, these historically-reliable figures confirm what we’re seeing at the sharp end.

“Despite continuing worries about the cost of living and seemingly slowing pace of mortgage rate cuts, buyers are taking advantage of more property choice while sellers try to attract those wanting to move before higher stamp duty charges apply in April.

“However, overall caution remains so there are more viewings before offers are submitted and transaction times are lengthening.

“Hopefully, the Bank of England follow the government’s current mantra of trying to boost growth and cut interest rates soon, which will inevitably improve housing market activity rather than keeping rates higher to control inflation."