Buyer enquiries fall but sales activity to pick up in next three months – RICS

Lockdown has seen sellers holding off putting their homes up for sale, although sales activity is expected to rise in the coming three months as restrictions ease, according to the February 2021 RICS UK Residential Market Survey.

For the second month in a row, the number of new buyer enquiries fell in February, as RICS revealed the net balance came in at -9% – although this was up from -29% in January.

The number of properties being listed for sale also fell for the second consecutive month, with respondents anecdotally citing the current lockdown restrictions and waiting on clarity about the stamp duty holiday extension for the reasons behind the fall in appetite.

RICS suggested a lack of demand from buyers and sellers saw a broadly flat trend in newly agreed sales, with a net balance of +1% of respondents reporting a rise in completed sales.

Ahead of the Chancellor’s Budget, respondents to the January survey had anticipated sales would slow as the stamp duty holiday came to an end. However, near term sales expectations moved into marginally positive territory at +6% this month, marking the strongest reading since October last year.

RICS chief economist, Simon Rubinsohn, said: “The measures announced last week by the Chancellor should help support the housing market over the coming months with concerns around a cliff edge end to the stamp duty break eased.

“However, a very clear message emanating from the latest survey is that more needs to be done to address the shortfall in supply with price and rent expectations very evidently continuing to accelerate.”

Looking ahead, the findings suggested that sales volumes are also expected to grow over the next 12 months as a net balance of +16% of respondents anticipate an increase – the strongest net balance since February 2020.

In terms of house price growth, a net balance +52% of respondents reported an increase in prices in February, which was marginally up from +49% in January. RICS suggested the measure is indicative of house price inflation maintaining momentum.

Rubinsohn added: “It is critical that a holistic approach is taken to the housing market ensuring that policy is designed to deliver across tenures and indeed to improve the environmental quality of the existing stock through a retrofit programme.”

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