The results of February 2018 RICS Residential Market Survey provide little sign of any material shift in sentiment amongst respondents, at least as far as the headline numbers are concerned.
Critically, the best guides to future activity for the whole of the country remain subdued. For example, the RICS New Buyer Enquiries series, which is a good lead indicator of Bank of England mortgage approvals, fell for the eleventh month in succession with a net balance reading of -16%. Meanwhile, the Newly Agreed Sales net balance, which leads official transaction data, came in similarly at -17%.
This would appear to suggest that the government’s attempt to breathe fresh life into the market though eliminating the stamp duty charge for most first-time buyers in the Budget is not having a significant impact on overall demand. Alongside ongoing concerns about affordability in some areas of the country, part of the problem may lie in the lack of choice of property to purchase with the RICS New Instruction indicator falling once again, and by the biggest margin on a seasonally adjusted basis (-24% in net balance terms) since July 2016. This has pushed the average inventory (per branch) on the books of agents who respond to the survey to a new record low of just under 42.
Full report: RICS UK February Residential Survey