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In the latest report from the Royal Institute of Chartered Surveyors (RICS), surveyors are forecasting a positive turnaround in property prices both in the short and long term. The March survey reflects a growing optimism, fuelled by improved market conditions, as new property listings continue to rise for the fourth consecutive month, accompanied by a surge in buying demand. Additionally, the stabilisation of house prices after last year’s declines suggests a promising outlook for the UK housing market.
According to the data, there has been a notable increase in buyer demand, with a net balance of +8% of respondents reporting a rise in new buyer enquiries in March. This marks the most optimistic result on this indicator since February 2022. Moreover, the flow of new listings entering the market has also intensified, with a net balance of +13% of respondents observing an uptick in new instructions in March.
Looking ahead, survey respondents are expressing confidence in further market improvement over the coming months, with a net balance of +13% predicting a rise in sales volumes in the next three months compared to the previous reading of +6%. Moreover, there is a growing positive sentiment regarding the longer-term outlook, with a net balance of +46% anticipating an increase in sales activity over the next 12 months, up from +42% in February.
Tarrant Parsons, RICS senior economist, commented on the gradual recovery across the UK housing market, highlighting the consecutive rise in new buyer enquiries as a promising sign. Parsons also noted the potential impact of a more favourable inflation backdrop, suggesting that expectations of a Bank of England interest rate reduction later in the year could further support market stability.
In response to the increased activity in the housing market, the government’s recent announcement of an inquiry into the home buying and selling process has been welcomed by RICS. This inquiry aims to assess the effectiveness of current processes and identify areas for improvement to benefit consumers and industry professionals alike.
Former RICS residential chairman and London estate agent Jeremy Leaf acknowledged the encouraging figures, noting a surge in interest from both buyers and sellers after a period of subdued market activity. However, Leaf emphasised ongoing affordability challenges in the residential market, which could prolong decision-making processes and temper price increases.
Tomer Aboody, director at MT Finance, echoed sentiments of growing buyer confidence amidst expectations of a reduction in interest rates and an increase in housing stock. Aboody emphasised the positive sentiment prevailing in the market, despite looming uncertainties such as an upcoming general election.
Overall, the RICS report paints a picture of cautious optimism in the UK housing market, with indications of a sustained rebound in property prices supported by improving market conditions and government initiatives aimed at enhancing the home buying process. As the market continues to evolve, stakeholders remain hopeful for a more resilient and dynamic housing landscape in the months to come.