The August 2016 RICS Residential Market Survey results suggest confidence continues to recover gradually across the sector, following a significant drop immediately after the EU referendum.
Prices and sales volumes are now expected to rise going forward, both at the three and twelve month time horizons, with a more stable trend in activity driving the improvement in sentiment. The headline price indicator edged higher during August, with a net balance of +12% of respondents reporting an increase in prices (up from +5% previously). This halts a run of five consecutive reports in which the net balance had softened, although the current reading is still the second weakest posted over the past eighteen months.
In London, the net balance remained negative for a sixth consecutive month, with 30% more respondents noting a fall in prices, as opposed a rise. By way of contrast, the net balance figures suggest prices increased in most other parts of the UK.
Looking ahead, national near term price expectations climbed into positive territory for the first time since April, with a net balance of 10% of respondents now anticipating prices will rise over the coming three months.
Nevertheless, expectations remain generally modest across the UK. Contributors are projecting prices in the North East to slip a little further in the near term but London expectations have now stabilised. Further out, over the next twelve months, prices in the capital are projected to see little change, while all other parts of the UK are expected to see house prices drift higher.
The real shortage of property for sale remains an overriding feature of the market and also a key factor supporting prices. This looks set to persist for a while yet as new instructions to sell declined once again during August, albeit only marginally.
As a result, average stock levels on estate agents books slipped for the third successive month and now stand within a whisker of the record low posted in December of last year.