Brexit and general election continue to slow down housing market

During October, 37 per cent of agents in the West Midlands reported a decline in new buyer enquiries – up from 29 per cent in September, according to the monthly RICS UK Residential Market Survey.

Alongside this, 31 per cent of respondents reported a fall in newly agreed sales last month.

Looking ahead, more agents in the West Midlands do not expect to see sales increase over the coming three months, but 19 per cent expect to see sales levels rise over the coming 12 months.

As the UK continues to struggle with housing supply, 53 per cent of respondents noted a fall in new instructions to sell in the West Midlands last month; a longstanding trend.

This decline in sales stock was reflected across the whole of the UK. In addition, 49 per cent of survey participants reported an annual decline in the level of market appraisals undertaken which is the most negative since the series began in 2017.

Uncertainty

Stephen Smith, of Walsall-based property agents Fraser Wood, said: “There is a lack of quality sales instructions. The middle to high end of the market is suffering the most from buyers’ lack of confidence. This has been a continuing theme in recent months.”

Moving to prices, 16 per cent more respondents reported a rise in house prices last month – up from 12 per cent in September and 30 per cent expect to see prices increase further over the coming 12 months. Comparatively, prices in Northern Ireland, Wales, Scotland and the North West of England are also expected to grow over the coming year.

In the lettings market, 16 per cent of respondents in the West Midlands saw an increase in tenant demand, yet landlord instructions failed to pick-up, resulting in 52 per cent of contributors expecting rents to rise over the coming three months. The survey revealed that rental growth expectations for the near term have strengthened across all UK regions – due to rising demand outstripping supply – with all UK regions projected to see an increase in rents over the coming three months.

Simon Rubinsohn, RICS chief economist, said: “The latest survey feedback continues to suggest that both buyer and seller activity remains in a holding pattern, hampered by political and economic uncertainty. Given the upcoming general election next month, it appears unlikely that these trends will pick-up to any meaningful extent over the remainder of this year.

“The picture remains very different on the lettings side however, with tenant demand gathering momentum over recent months. This is running against an increasingly tight supply backdrop for rental properties and seems set to squeeze the pace of rental growth higher going forward.”