0:01 AM, 11th July 2024, About 6 months ago
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Despite a sluggish housing market, a post-election bounce could boost optimism as a new government brings fresh hope for recovery.
The survey by RICS reveals buyer numbers dropped for the third consecutive month (-7%), and agreed sales fell again.
The number of new sellers also declined, after rising for six months.
However, a RICS survey reveals that a net balance of +20 respondents anticipates a recovery in residential sales, up from +10 in June and marking the highest level of sales expectations since January 2022.
Tarrant Parsons, RICS Senior Economist, said: “Although activity across the housing market remained subdued last month, forward-looking aspects did improve slightly.
“There are some factors emerging now that could support a recovery in the months ahead.
“If the Bank of England does decide that the current inflation backdrop is benign enough to start loosening monetary policy next month, this may prompt a further softening in lending rates. In addition, the recent election delivered a clear outcome, with housing pushed up the political agenda.”
However, the rental market is still facing supply and demand issues, as more landlords leave while tenant demand keeps rising.
Mr Parsons adds: “Looking across to the rental market, a net balance of +28 of respondents saw a pick-up in tenant demand during June (part of the non-seasonally adjusted data).
“Meanwhile, the new landlord instructions net balance slipped from -3 to -11, pointing to a renewed decline in new rental listings. Looking forward a net balance of +38 of respondents anticipate that rental prices will rise over the coming three months a trend seen since January.”
Sarah Coles, head of personal finance, at Hargreaves Lansdown says it remains to be seen whether a Labour government will make a difference to the housing market.
She said: “A new government has breathed a new air of optimism into the property market. Agents are hoping this means sales will pick up, and falling house prices will reverse in the year to come.
“It’s the most positive agents have been about sales since the start of 2022, and they’re walking to viewings with a new spring in their step. However, it remains to be seen whether buyers will share their view.”
Ms Coles adds “In the interim, if you’re looking to buy right now, this remains a buyers’ market, so there should be some bargains to be had.
“If the agents are right, you may need to take advantage of a relatively small window of opportunity. If optimism catches on, you’ll be competing with more buyers and hopeful sellers will hold firm on prices.”
Jeremy Leaf, north London estate agent and a former RICS residential chairman, says the election had little impact on the housing market.
He said: “The election had limited impact on our buyers and sellers, not just because the outcome had been largely factored in but the pace and level of mortgage rate reductions was much more relevant.
“Over the past month and particularly since the result, we have seen a rebound in confidence and activity.
“However, we are not getting carried away as the increased choice and continuing economic concerns will keep the higher price aspirations of homeowners in check.”
House prices are still continuing to fall, particularly in East Anglia, the South East and South West of England.
However, house prices in Northern Ireland and Scotland remain on an upward trajectory recording positive net balances of +64% and +29% respectively.
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