House sales continue to rise in the SW
Despite growth in housing sales faltering across the UK as a whole, the South West reported continued improvement in sales, according to the Royal Institution of Chartered Surveys (RICS) Residential Market Survey for December 2016.
While the majority of the UK saw a fall in sales in December, the South West saw 16% more chartered surveyors reporting a rise in sales last month; however figures for predicted sales over the next three months marked a noticeable slow down with 12% of respondents anticipating a fall.
Whilst respondents anticipate a slower start to 2017, the survey showed that the number of new house buyers rose at a relatively healthy pace in December and showed much stronger figures than the majority of the UK regions (+23% net balance). New instructions to sell also rose throughout December with 28% of respondents reporting a rise instead of a fall.
Nonetheless, stock on agents books remains close to record lows in the region and this remains a real concern highlighted by respondents which could weigh activity going forward.
Looking at house prices for December, 37% more chartered surveyors reported a rise over a fall. This measure suggests prices are rising relatively firmly in the region and continues a run of four successive months of higher house price balances. Near term price expectations continue to point to a flatter trend over the coming three months suggesting immediate price pressures may ease slightly given the more balanced demand and supply picture in the region recently. However, the twelve month expectations remain firmly positive with 67% more respondents suggesting prices will rise.
Simon Rubinsohn, RICS Chief Economist commented: “A familiar story relating to supply continues to drive both the sales and lettings markets impacting on activity, prices and rents. The eagerly awaited housing white paper should help to create a more positive framework for new build delivery but with the best will in the world, it is going to take time before the resulting uplift in the development pipeline begins to impact on the opportunities for either homebuyers or tenants.
John Corben FRICS of Corbens in Swanage comments: “There is a shortage of properties to sell and higher demand than usual at this time of year. The exceptionally low interest rates and fall in the value of the pound seems to have led to many people investing in the buy-to-let market, despite stamp duty increases.”
Despite a leap in new instructions in the South West lettings market (+27 net balance) recorded in December, rent expectations for the region, in the coming three months, continue to rise with 53% more chartered surveyors anticipating a rise. The South West reported the strongest expectations for rental growth across the entirety of the UK and was the only region aside from London for instructions to outpace demand.
Paul Oughton of Moore Allen & Innocent LLP in Cirencester and the Cotswolds comments: “More tenant movement so more existing properties available. Also some new landlord activity and portfolio landlords seeking right opportunities.”
