Home buyer demand continued to “recover modestly” over February as new buyer enquiries rose by 6 per cent, research from the Royal Institution of Chartered Surveyors has revealed.
Rics’s UK Residential Market Survey pointed out this was the second consecutive month in which buyer demand increased, as January saw a similar 6 per cent rise in demand, therefore signalling an upward trend.
However, not all findings were as positive, as the net balance of agreed sales fell by 3 per cent over February.
The survey pointed out, while this is “softer” than the findings in the previous report which showed an increase of 4 per cent, both readings indicate a stronger trend in sales volumes than was evident through much of the past 12 months.
Rics chief economist, Simon Rubinsohn, said: “The February Rics survey provides some ground for encouragement around the sales market with not just buyer interest staying positive for the second successive month but also the uplift in new instructions to agents.
“Whether the increase in stock coming back to the market will be sustained is likely to be a critical factor in explaining how things play out over the balance of the year especially with new builds likely to remain constrained.”
Additionally, MT Finance director of property lender, Tomer Aboody, said: "With more properties coming onto the market, we are seeing some confidence creep back as sellers feel the time is right to list."
Explaining this, Aboody said that, as rates begin to stabilise and even reduce, buyers are prioritising their purchase once more and increased stock levels are giving them more options, which in return should keep prices in check and ensure they don’t rise too steeply.
"With further indications that the economy is getting back on track, we expect a big push from the government before the election, perhaps with a reduction in stamp duty, along with falling interest rates,” he added.
House prices
The survey also provided insight into house prices, reporting that headline prices fell by 10 per cent.
Rics pointed out this showed the established downward trend, which has been “evident” over the past year, stabilising.
This was because the February reading is the least negative figure since October 2022.
Meanwhile, in the lettings market, tenant demand was found to have increased over the latest survey period.
However, Rics pointed out that tenant demand growth appears to have eased recently.
“There are signs that the relentless upward trend in private rents is losing momentum,” Rubinsohn explained.
Although, he added that: “Fresh demand is still comfortably outstripping supply in this area which suggests there is unlikely to be any significant relief for tenants.
“Indeed, feedback from respondents to the survey continue to highlight the challenges in the sector resulting from a whole host of measures introduced in recent years.”
tom.dunstan@ft.com
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