Optimism in the UK housing market has reached “the highest level since January 2022” following the recent general election, research from the Royal Institution of Chartered Surveyors has revealed.
The survey found, over the next three months, a net balance of 20 per cent survey respondents anticipate a recovery in residential sales.
This is an increase from the 10 per cent of respondents who anticipated a recovery in June and the highest level of sales expectations since January 2022.
Rics argued these results indicate that respondents have confidence in the newly elected Labour government who have voiced a “strong commitment” to boost the housing market, aiming to deliver 1.5mn homes over the next five years.
This increased optimism came despite the market being slightly subdued last month as the newly agreed sales gauge posted a net balance of -7 per cent.
Rics senior economist, Tarrant Parsons, said: “Although activity across the housing market remained subdued last month, forward looking aspects did improve slightly."
He added that this sentiment seemed likely to improve in the near future as "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,” he explained.
“In addition, the recent delivered a clear outcome, with housing pushed up the political agenda.”
Similar positivity was found for price expectations as, over the next 12 months, a net balance of 54 per cent of respondents believe prices will continue to rise.
Rics suggested this highlights a “key challenge” for the new government as boosting housing supply in the UK “will not be an easy task”.
However, it added that any boost to confidence from aspects such as the possibility of lower interest rates should, in theory, “intensify the nation-wide affordability challenge”.
Positivity was also displayed by Shawbrook managing director of real estate, Emma Cox, who said: “The long term outlook is improving.
“Though interest rates have remained at 5.25 per cent since August of last year, mortgage rates have begun to come down which has helped to prompt confidence amongst professional investors.
“This has been helped by inflation similarly coming down to 2 per cent, sending a sign that economic stability is looking to be on the cards for the UK.”
Cox also discussed the perceived impact of the election, stating that, although elections typically do not have an immediate and significant impact on the property sector, investors are “closely monitoring manifesto promises”.
“Labour’s broader focus on tenant rights, affordable housing, and robust tax relief policies will influence future investment strategies,” she explained.
“Despite this uncertainty, property prices are expected to continue rising, and rental yields remain strong in key investment hotspots, giving professional landlords reasons to feel optimistic.”
Rental market
Meanwhile, across the rental market, a net balance of 28 per cent of survey participants saw a pick-up in tenant demand during June.
