Housing activity indicators collapse in April – RICS

RICS has reported the indicators used to measure housing activity in the UK collapsed during April, reflecting the impact of lockdown on the housing market.

The professional body revealed 80% of contributors to the RICS UK Residential Survey saw both buyers and sellers pulling out of transactions during April.

RICS suggested that the market effectively being closed for business had resulted in the newly agreed sales balance for April falling to -92%, down from -68% in March.
In April, the survey sought views on the potential support measure of a stamp duty holiday from Government as sales restart. RICS found the majority of respondents (62%) believed that a stamp duty holiday would help the market recover after the pandemic, by lifting sales and leaving prices relatively unchanged. On average, RICS said that respondents anticipated sales would rebound to their previous levels in around nine months.
However, RICS also revealed a net balance of -93% of respondents had reported a decline in new buyer enquiries over the course of April, dipping further from a net balance of -76% in March.

New instructions also continued to fall, with -96% of contributors reporting a drop rather than rise in new properties being listed for sale. RICS said this was the weakest net balance reading since the inception of its series in April 1999.

RICS chief economist, Simon Rubinsohn, commented: “Not surprisingly, the latest survey shows that housing activity indicators collapsed in April reflecting the impact of the lockdown. Looking further out, there is a little more optimism but the numbers still suggest that it will be a struggle to get confidence back to where it was as recently as February.

“Moreover, whether this can be realised will largely depend on how the pandemic pans out and what this means for the macroeconomic environment.

“Critically, to ensure the housing market can begin to operate in a more functional way and that developers have the confidence to continue building in these very difficult circumstances, further specific interventions from Government, following on from the announcement of flexible site working hours, and support to smaller developers announced yesterday, are likely to be necessary.”

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