May 2017’s RICS UK Residential Market Survey painted a subdued picture of the market once again, with instructions, sales and enquiries falling throughout. Although it remains positive, price growth momentum has also slipped, with a further decline predicted on a near-term basis. The election has also been cited as a contributor to reduced market activity, as both buyers and vendors tend to become more hesitant during times of political upheaval.
Although it fell from 22% to 17% – the lowest reading since August last year – the headline price growth indicator remained consistent with the minimal gains. Prices in London continued to fall, with the gauge for price growth remaining in negative territory for the fourteenth successive month. Across everywhere else in the UK, prices tended to see varying degrees of uplift.
Price expectations in the near term softened for the third consecutive month, falling from 5% in April to -1%. In the South East, the near-term expectations indicate price weakness, whereas there is much more confidence for price growth in twelve months’ time. Nationally speaking, the longer term expectations stayed strong with a net balance of 54%, with contributors predicting house price inflation to average at a yearly 3.5% in five years’ time.
Whilst prices are being upheld by the current lack of supply, the market gives no indication that the fall in sales instructions will subside. May saw the lowest number of new listings since July 2016, with 25% more respondents noting a reduction. However, this fall has been linked to extraneous factors such as the General Election. Vendor uncertainty means the levels of supply remain low, with the number of available homes on estate agents’ books at 43.