Latest RICS report shows housing market on the rise

The latest RICS Residential Survey reports a positive shift in the UK housing market, spurred on by the recent falls in mortgage interest rates.

Buyer demand and sales activity are both on the rise, with industry professionals anticipating further growth as we head into the final quarter of the year.

RICS reports the number of people looking to buy homes in August saw a net balance of +15 of respondents, up from +4 in July.

And house prices are on the rise again, moving into positive territory for the first time since October 2022, with a net balance of +1 and with +14 of RICS’ respondents predicting a steady rise over the following three months.

Uptick

On the supply side, there was a modest uptick in the number of new property listings (+7 up from +3 in July), with the volume of appraisals suggesting this process will continue, improving the choice for new buyers.

Looking ahead, there is a growing sense of optimism with a net balance of +45% of respondents envisaging sales activity strengthening over the next twelve months.

In the rental market, although tenant demand remains high, growth has slowed. The survey shows a net balance of +11 in August, which is down from +26 in July and supply levels remain sluggish, with new landlord instructions dropping to -21 from -9 last month.

Affordability remains an issue in the sales market.”

This imbalance is expected to push rents higher, although +39 of survey respondents are predicting that supply will increase in the coming months.

RICS Chief Economist, Simon Rubinsohn, commented: “Affordability remains an issue in the sales market even with somewhat cheaper finance now available but the picture appears even more acute in the lettings market where the amount of rental stock continues to diminish.

“Contributors continue to point to landlords looking to scale back their portfolios which will inevitably increase the imbalance that already exists in the market”.