22nd
Jan 2024
At last the UK housing market was on the up in December as buyer demand steadied and sales picked up, however there is still a seismic shortage of private rental homes, according to the Royal Institution of Chartered Surveyors.
Its most recent UK Residential Survey of lettings and sales markets found that private renters’ demand increased in December with a net balance of + 17 per cent of respondents from agents and landlords seeing a rise.
However the rise dropped behind previous months’ demand as slowing down during the festive month.
Participating agents reported a scarcity of landlord instructions during 2023 causing a shortage of PRS housing stock, and of course this caused a rush of increasing rental prices with 50 per cent predicting rents to increase during this year’s 1st Quarter with a probable 4 per cent rise in rental prices during 2024.
The organisation also believes there will be an annual average of a five per cent increase over the next five years.
The Institute’s senior economist Tarrant Parsons, said: “With 2023 proving to be a particularly challenging year for the UK housing market, it appears recent weeks have seen a little bit of respite emerge.
“Supported by an easing in mortgage interest rates of late, buyer demand has now stabilised, and this is expected to translate into a slight recovery in residential sales volumes over the coming months.
“Nevertheless, the lending climate is set to remain restrictive compared to much of the post global financial crisis era next year, meaning any uplift in activity is likely to be limited for the time being.”
The organisation states the sales market is recovering as lower mortgage rates are helping exponentially.
Near-term sales potentials rose slightly whilst from a long term perspective it suggests a steady market.
New buyers interest enquiries was -3 per cent in December which was a massive decrease from November’s -13 per cent.
This continues a continual drop of negative buyer enquiry over the last four months and is the first time since April 2022 has fallen between the classed neutral territory of -5 per cent to +5 per cent.
A director of a property lender, said: “As lenders look to reduce mortgage rates in order to increase lending volumes, buyers are definitely feeling more confident in their ability to buy, both due to affordability but also with the possibility of more stock coming onto the market.
“2023 was an incredibly flat year for sales, with multiple factors affecting the market, from interest rates rises and high inflation to low stock levels.
“Better sentiment is expected with encouraging prospects for the year ahead.”
Jeremy Leaf of an estate agency said: “Although inflation may have picked up, the downward trend has prompted a reduction in mortgage rates and lender appetite which in turn has helped to increase activity.
“Buyers and sellers are gaining confidence from an expectation that the worst of the market may be behind us, supported by still-strong employment numbers.
“Looking forward, we don’t expect any massive changes, but certainly firming prices and more sales agreed than we perhaps dared to expect only a few months ago.”
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