This month the Royal Institute of Chartered Surveyors released their November 2023 RICS Residential Market Survey, a survey which analyses the residential property market and trends. Against a backdrop of challenges, subtle shifts and emerging trends bring a somewhat changed perspective and a hint of optimism. In this blog we will give a rundown of what exactly the survey has found.
RICS Residential Survey – Buyer Demand and Sales Activity
The survey paints a nuanced picture of buyer sentiment, with a marginal upswing driven by a recent easing in mortgage rates. While the net balance for new buyer enquiries remained at -14% in November 2023, indicative of a soft trend, this figure represents the least negative reading since April 2022. Regionally, a noteworthy trend emerges as feedback on new buyer enquiries across the UK exhibits a marked improvement from previous months.
Agreed sales, marked by a national net balance of -11%, suggest a potential slowing in the decline of sales volumes. Notably, the average time taken to finalise a sale has experienced a minor reduction from its peak of 20 weeks in September to approximately 19 weeks presently. The near-term sales expectations index, registering at +6% in November, delivers a cautiously positive outlook, marking the first positive reading since early 2022. Looking further ahead, the twelve-month horizon forecasts a net balance of +24%, signifying the most optimistic return since January 2022.
Supply Dynamics and House Prices
On the supply side, the survey indicates a sense of stability, with the net balance for new instructions holding steady at -5% in both October and November. However, a notable divergence appears in market appraisals, which are reported to be below levels seen twelve months ago, reflected by a net balance of -41%. House prices, while still on a downward trajectory with a net balance of -43% in November, show a considerable improvement from the -61% recorded previously. This suggests a gradual moderation in the pace of decline over the last three months.
Breaking down the data reveals a regional separation, with most areas experiencing a slowdown in house price declines, except for the persistently negative readings in the Southeast and East Midlands. Equally, Northern Ireland has defied the broader trend, witnessing an upward shift in house prices in recent months. Although near-term house price expectations point to some downward pressure, longer-term projections have stabilised, indicated by a net balance of -10% over the next twelve months.
Lettings Market and Expert Insights
In the lettings market, the survey reveals a net balance of +20% for tenant demand, marking the most modest reading since January 2021. Meanwhile, landlord instructions continue to decline, with a net balance of -18% in November. Despite a recent easing in twelve-month expectations, the headline projection anticipates close to a 4% rise in rents over the next year, underscoring the market’s resilience.
Local estate agents to Oportfolio’s head office in Putney shared their perspectives. Alex Howard Baker from Savills in Putney highlighted the prevalence of down valuations and the positive impact of sub-5% fixed-rate mortgages on buyer sentiment. Allan Fuller of Allan Fuller Estate Agents also in Putney observed a slower November in sales, attributing it to potential buyers opting to reassess their plans in the upcoming year.
Speak To a Local Putney Mortgage Broker
The November 2023 RICS survey unravels the intricacies of a property market in a state of flux. While challenges persist, subtle positive shifts in mortgage rates, buyer sentiment, sales activity, and regional dynamics suggest a market finding its balance. As we approach the year-end, the evolving UK economic landscape positions the property market for a potentially more optimistic trajectory in the coming months. If you or anyone you know is considering purchasing a property in 2024, then please feel free to contact our helpful and knowledgeable mortgage brokers today. We are here to help you.