Estate agents face subdued transaction volumes for the next 12 months, the latest Royal Institute of Chartered Surveyors, (RICS), data reveals.

Its monthly housing survey suggests that the market may be past its worst, but any improvement remains fragile.

New buyer enquiries remain negative at -29%, although it is a marginal improvement on the -34% recorded in the previous two months and marks the least negative reading since February.

Newly agreed sales also remained subdued at -32%, compared with -35% previously.

Near-term sales expectations improved to -16%, up from a recent low of -34% in March.

Looking ahead, respondents expect sales volumes to remain broadly flat during the next twelve months, with a positive net balance of 1%.

House prices

House prices continue to face downward pressure nationally, with the headline price balance at -33%, broadly unchanged from recent months.

Tarrant Parsons, RICS’ Head of Market Research and Analysis, (main picture), says: “June’s survey results offer some cautious encouragement that the worst of the slowdown in market activity may be beginning to pass, with several key indicators moving in a less negative direction for a second consecutive month.

“That said, any nascent improvement remains fragile and is now being tested by renewed political uncertainty on the domestic front.

“While the Bank of England left interest rates unchanged, uncertainty around the outlook for inflation and borrowing costs continues to weigh on sentiment, even if the recent decline in oil prices is a welcome development.

“Until there is greater clarity over both the political backdrop and the path of interest rates, housing market activity is likely to remain relatively subdued in the near term.”

Housing market activity is likely to remain relatively subdued in the near term.”

Industry reaction

Tom Bill, head of UK residential research at Knight Frank, says: “UK housing market activity is improving from a low base as the military conflict in the Middle East de-escalates and mortgage rates edge lower.

“However, there is no respite for buyers and sellers with a summer of speculation underway about which property taxes will rise in the Budget.

“Current propositions include a land value tax, which feels like a long-term wish rather than a short-term plan, and capital gains tax reforms that have been considered and discarded by previous administrations.

“For the third year in a row, uncertainty will keep a lid on prices and sales volumes this summer.”

Jeremy Leaf, north London estate agent and a former RICS residential chairman, says: “Ongoing worries about the conflict in Iran and its impact on the economy – especially mortgage rates and inflation – as well as domestic political uncertainty means home buying and selling is being pushed further down the ‘to-do’ list.

“Nevertheless, those who need rather than want to move are negotiating hard and trying to anticipate the market’s direction of travel.

“The net result is prices and activity are holding up better than we dared hope although we are not expecting a significant summer rebound, bearing in mind these distractions are likely to continue for a few more months at least.”