Lower mortgage rates helped boost the housing market last month with a growing number of chartered surveyors reporting an increase in new buyer enquiries.
The latest Royal Institution of Chartered Surveyors Residential Survey found that buyer numbers rose at their fastest rate for three years in August, with the number of properties being listed and sales agreed also increasing. A net balance of +45% of respondents to the survey said that they envisage sales activity strengthening over the next twelve months.
Respondents are also increasingly optimistic about property prices going up, with a net balance of +50 respondents expecting house prices to rise across all parts of the UK over the year ahead following almost two years of decline. House prices continue to rise firmly in Northern Ireland and Scotland according to the latest results, although feedback around prices in Wales, the South East and the South West of England was a little weaker than the national average.
Although the outlook for the property market overall is improving, there are some concerns about the impact the Budget on 30th October could have, particularly if the Chancellor announces tax rises affecting homeowners and prospective buyers.
Simon Rubinsohn, Rics chief economist, said: “The latest RICS survey captures an improvement in sentiment over the past month in the wake of the modest decline in mortgage rates with buyer interest improving, albeit from a relatively low base, and stock levels edging up.
“However, anecdotal remarks from respondents still demonstrate the need for realistic pricing to get deals done with uncertainty both around the scope for further interest rate cuts and the likely contents of the forthcoming Budget keeping the mood in check.”
Tenants face rising rents
The picture is less rosy for tenants, who face higher rents and a limited choice of properties to rent.
A net balance of +39 respondents to the RICS survey said they expect rental costs to continue to increase steadily in the months ahead, whilst new landlord instructions once again saw a negative trend..
