Property sales rising as mortgage rates drop, report surveyors

House prices are expected to remain flat over the next 12 months although buyer enquiries are the least downbeat since April 2022, the latest Royal Institute of Chartered Surveyors (RICS) UK Residential Survey reveals today.

Its December 2023 Survey reports activity picking up as mortgage rates fall with near-term sales expectations moving up while the longer-term outlook points towards a market moving out of negativity and into a flatter environment.

PRICES WILL STABILISE

Survey respondents reckon house prices will stabilise although expectations remains varied across the UK, with respondents from Northern Ireland, the North West of England, and Scotland anticipating higher prices during the next 12 months.

Tarrant Parsons, RICS Senior Economist, says: “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 buyer demand has now stabilised and this is expected to translate into a slight recovery in residential sales volumes over the coming months.”

But he adds: “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.”

BIG CONCERN

Keith Pattinson, Chairman of Keith Pattinson Estate Agents in Newcastle Upon Tyne, says: “A big concern to anyone is the increase in minimum wage, which is not being related to increased productivity.

“This will cause more unrest, affecting staff and employers. Inflation as costs rise will mean most are worse off.

“There is interference with rental market, unlike other businesses.”

Richard Franklin, Managing Partner of Tenbury Wells-based Franklin Gallimore, adds: “The predictions of a prolonged spell of interest rates at current levels has deterred all but the hardiest buyers.

“Lenders are being the most pedantic I can recall with petty matters inhibiting lending – which I read as ‘we don’t really want to lend at present’”.

TYPICALLY SUBDUED

And  Roger Punch, Consultant at Marchand Petit in South Devon, says: “A typically subdued month, but the sentiment is of mild optimism for the New Year ahead.

“Much will depend of the timing of the General Election, which will, as always, cause a pause in activity in the run-up.

“For now, asking prices need to be generally kept cautious for success.”

Emma Cox, Managing Director of Real Estate at Shawbrook Bank, says: “The gradual improvement in the market, falling mortgage rates and a rise in tenant demand will provide landlords with confidence in 2024.

“Despite tough economic conditions and uncertainty over the past 12 months, landlords have continued to add to their portfolios to cater for the needs of the rental market, which continues to grapple with a lack of suitable and available properties.”