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The boom could turn to bust after furlough scheme ends, agents tell RICS

RICS's July survey of estate agents reveals a booming sales and lettings market, but nevertheless agents are worried that it won't last.

Nigel Lewis

rics estate agents

Estate agents have reported a flood of buyers, landlords and tenants re-entering the market during July but has warned that many agents are worried by the longer-term health of the housing market once the mini-boom subsides.

RICS regular monthly survey of member estate agents also reveals that the recent Stamp Duty changes are having their desired effect and playing a significant role in lifting demand and sales, and that house prices moved into positive territory for the first time since March.

But many told RICS that they expect the current housing market boom to only last for another three months as government support measures for the economy are phased out.

A net balance of -10% of estate agents expect sales to tail off over the next 12 months.

Simon Rubinsohn (pictured, above), the RICS Chief Economis, says: “It is interesting that there remains rather more caution about the medium term outlook with the macro environment, job losses and the ending or tapering of government support measures for the sector expected to take their toll.

“Significantly, some contributors are now even referencing the possibility of a boom followed by a bust.”

Sam Hunter (left), CEO of Homesearch, says: “Following reports yesterday confirming that the UK is now formally in a recession, there are two questions many agents will be asking themselves over the next few weeks; ‘how long can the current level of demand continue?’ and probably more importantly, ‘how do I best insulate my business and build a solid pipeline in case the economy doesn’t recover at the pace we all hope that it will?’.

Link to Anthony CodlingAnthony Codling (right), CEO of Twindig, says: “This survey echoes what we have been hearing from estate agents:  rising buyer enquiries and increasing sales instructions.

“This has led to higher sales per agent of more homes for sale. So far so good, however, the good news in the short term it is tempered by caution about the negative impact of the closing furlough scheme and the ending of the stamp duty holiday in March. It seems that for now, surveyors believe that the housing market mini-boom is just that rather than a sustained recovery. “

August 13, 2020

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