UK housing market shows fall in sales in May, says RICS
The latest RICS survey of the UK housing market reveals that both new and completed sales fell in May, adding to fears over the state of the property market in the UK.
The report, published today, also shows that new enquiries from potential buyers fell slightly during May, down to a reading of -2. The reading for April was level, which improved on the March reading of -6.
Commenting, RICS housing spokesperson, Ian Perry, said: "Buyer interest in purchasing property remains flat across much of the country and there is little sign of this changing any time soon. Uncertainty over the economic outlook remains as important as the availability of mortgage finance in depressing demand.”
Newly agreed sales fell with just five per cent more surveyors reporting sales rose rather than fell and the average number of completed sales per surveyor fell to just 14.7, the lowest reading since January. The long term average for this measure is 26.5.
Additionally, the sales to stocks ratio, a key indicator of the balance between demand and supply, fell to 20.6 per cent, which is well below the average of 33.5 per cent.
Howard Archer Chief UK & European Economist for HIS Global Insight said: “The supply-demand metrics in the housing market will be a key determinant in how house prices move over the coming months.”
Meanwhile, the survey revealed that 28 per cent more surveyors reported house price falls than price increases, the lowest reading since the beginning of this year. However, the majority of the price falls were between 0 and two per cent.
There was variation in the trend on house prices throughout the country as has been the case in recent months. London was the only region that saw more surveyors reporting price rises rather than falls. The price balance remains negative in Wales, Scotland and Northern Ireland.
The outlook from surveyors shows that expectations for future sales fell but are still at +9, whilst 27 per cent more respondents expect house prices to fall than rise over the next three months.
The lack of activity in the housing market means that demand for rental property is increasing.
Mr Perry added: “The appetite to rent is continuing to grow. And, with little new supply coming onto the lettings market, the cost of renting is increasing and will continue to do so."
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