Brexit continues to challenge the West Midlands’ housing market

Enquiries from new buyers saw the seventh negative reading in a row, with minus 26 per cent of respondents seeing a fall rather than rise in buyer demand.

Demand fell across all parts of the UK in March, according to the RICS UK Residential Market Survey.

As buyer interest declines, a net balance of minus 44 per cent of respondents reported a fall in agreed sales at the headline level in March.

This is consistent with a drop in the HMRC measure of transactions – currently running at around 100,000 per month – over the coming months. Beyond then, there is a little more optimism, with sales anticipated to rise over the course of the next year.

The ongoing decline in new properties coming on to the market in the region continues, having fallen in each of the past eight surveys. As a result, average stock levels on estate agents' books remain low at 33 properties per branch.

Looking at prices, plus three per cent of respondents saw a rise rather than fall in prices in March and whilst an improvement from February signals a flat picture, which is set to continue over the coming months.

Looking at other regions, London and the South East continue to display the weakest sentiment regarding prices, with Scotland and Northern Ireland the only parts of the UK to have seen sustained price growth on a consistent basis, over the past two months.

Stephen Smith, of Fraser Wood estate agents in Walsall, said: "The normal spring market has not materialised. There just seems to be a general lack of confidence in the market with viewers indicating that Brexit is a concern and sellers not wishing to commit at this moment."

In the West Midlands lettings market, demand from tenants rose slightly while landlord instructions slipped. On the back of this, contributors are expecting rents to rise in the coming three months.

Simon Rubinsohn, RICS chief economist, said: "Brexit remains a major drag on activity in the market with anecdotal evidence pointing to potential buyers being reluctant to commit in the face of the heightened sense of uncertainty. Whether any deal provides the shift in mood music envisaged by many respondents to the survey remains to be seen but as things stand, there is little encouragement to be drawn from key RICS lead indicators. We expect transactions to decline on this basis.

"Arguably more significant still are the signs that developers are continuing to adopt a more cautious stance with the trend in new residential starts now flatlining. Against this backdrop, there is little possibility of delivering the uplift in supply necessary to address the ongoing housing crisis."