Can we expect sales growth anytime soon?
Do you want the good news first?
Well, it looks like the housing market throughout the East Midlands is picking up. However, again it is a lack of stock that is holding back any sales growth.
The March 2018 RICS UK Residential Market Survey reported that buyer enquiries and agreed sales bounced back during last month.
Nottingham estate agent, Nick Aston, senior valuer at Walton and Allen, said: "When we compare Walton & Allen market appraisal enquiries to the previous year, they are consistently on the up, month on month. We are finding home owners are looking to sell, but there is some uncertainty as to when they want to put their property on the market.
"This could be due to a number of factors including Brexit, potential mortgage interest rate rises and the slow growth in house prices compared to the same time last year.
"It is true that there are many more buyers than current available stock across the country and ironically, properties in the East Midlands are selling faster than almost anywhere in the UK at an average of 58 days. So if home owners are looking to sell, and want to do it quickly for the right price, then the market is ideal."
Respondents to the survey also reported some volatility in new buyer enquiries and agreed sales in the East Midlands, since the start of 2018, but one of the main factors impeding growth, alongside the ongoing concerns over affordability, is the lack of fresh stock coming onto the market.
In March, the flow of properties slowed once again, marking the 30th consecutive month respondents reported a fall in the number of houses being put up for sale. As such, average stock levels on estate agents’ books remain near an all-time low.
In March, sales recovered very slightly, with 9 percent more respondents reporting a rise rather than fall; ending a run of negative readings stretching back to February 2017. To compare, respondents in virtually all parts of the UK noted either a flat or downward sales trend this month. Looking ahead, in the near term sales are expected to remain flat but the year ahead picture does look more positive, with 25 percent of contributors anticipating an increase in sales over the next year.
Prices in the East Midlands saw little change in March (net balance of +35 percent). As prices continued to rise across the region, anecdotal evidence suggests the lack of stock as the main driving force behind house price rises. House prices also continued to drift higher in all other parts of the UK apart from London, the South East, East Anglia and the North East, where respondents reported prices to be falling.
Simon Rubinsohn, RICS Chief Economist commented: “The latest RICS results provide little encouragement that the drop in housing market activity is likely to be reversed anytime soon. Apart from the implications this has for the market itself, it also has the potential to impact the wider economy contributing to a softer trend in household spending. This could make Bank of England deliberations around a May hike in interest rates, which is pretty much odds-on at the moment, a little more finely balanced than would otherwise be the case.
"The downshift in sales for the time being continues to be more visible in London and the South East with many other parts of the country continuing to show rather greater resilience. Feedback on expectations regarding transactions suggest this divergence will persist over the coming months.”
Looking ahead, the three month outlook for prices remains slightly positive and further out, the expectation is that prices in the region will continue an upward trend, with a net balance of +54 percent anticipating prices to be higher in the coming twelve months.