RICS says rents will rise as landlord instructions fall

RICS says rents will rise as landlord instructions fall

9:59 AM, 13th October 2022, About 2 years ago 1

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Rising interest rates and uncertainty about the economy have led to buyer interest falling – and fewer people wanting to sell in September, the latest RICS residential market survey reveals.

And in the lettings market, rent prices will continue rising as tenant demand picks up alongside a fall in landlord instructions.

The organisation also points out that an expected rise in mortgage rates over the coming six months will outweigh any potential boost from the cut to Stamp Duty.

In September, new buyer interest fell with a net balance of -36% of respondents citing a fall in enquiries.

Buyer interest has dropped in all regions

This is the fifth month in a row in which buyer interest has dropped with all regions/countries of the UK now experiencing this trend.

New instructions to sell also continued to fall, with stock levels remaining at historic lows.

Estate agents, on average, are holding just 34 residential properties on their books, and the pipeline appears to have deteriorated further, with the net balance for new market appraisals dropping to -20% (down from -3% in August).

As the market loses further momentum, sales have unsurprisingly fallen over the month, with the September figure the most negative reading since May 2020 and the number of sales have now fallen for five months in a row.

Looking ahead, sales expectations over the next three months, and the 12-month sales predictions also remain negative.

House prices are being propped up by a lack of supply

RICS says that house prices are being propped up by a lack of supply and since April, there has been an easing in house price growth.

Simon Rubinsohn, RICS’ chief economist, said: “The turmoil in mortgage markets in recent weeks has compounded the increasing level of economic uncertainty resulting from higher energy bills and the wider cost of living crisis, in shifting the dial in the housing market.

“Even though the headline price balance remains in positive territory for now, storm clouds are visible in the deterioration of near-term expectations for both pricing and sales.

“Looking further out, the picture portrayed by the RICS survey has clearly shifted in a negative direction.”

‘No surprise that negative sentiment is emerging’

Tomer Aboody, a director of property lender MT Finance, said: “Due to the uncertainty surrounding mortgage rates, along with the increase in the cost of living, it’s no surprise that negative sentiment is emerging, suggesting that the housing market is slowing down.

“Until Government and Bank of England policies are aligned, we will continue to face the uncertain shift in rates which means that buyers, along with sellers, would rather wait until things stabilise before making a move.

“This will mean a static market on the whole rather than price falls, unless sellers are forced to sell, which could be the case in some instances.”

Jeremy Leaf, a north London estate agent and a former RICS residential chairman, said: “The RICS survey has always been regarded as one of the most accurate, not least because data is collected from surveyors and agents ‘at the sharp end’ just before release.

“New buyers are pausing for breath while considering the pace and size of future interest rate hikes, so activity has reduced.”

‘Tight supply in the London property market’

Jean Jameson, the chief sales officer at Foxtons, said: “At Foxtons, we’re seeing house values hold up well, underpinned by tight supply in the London property market.

“We have seen continued strong demand through September in our offices, with new buyer enquiries up 4% compared to the same period last year, and new sales agreed up 7% on the same period last year.

“As we move towards year end, uncertainty in the economy and a rapidly changing mortgage market may affect buyer inquiries and new instructions across the industry and the UK, as people take more time to decide whether or not to move.”

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Mick Roberts

9:05 AM, 15th October 2022, About 2 years ago

No s__t Sherlock.
RICS says rents will rise as landlord instructions fall

U not gone to University for 4 years to surmise that have u RICS.

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