Housing market outlook more optimistic for year ahead

Property professionals’ expectations for future sales are becoming more upbeat, although the housing market remains subdued, according to surveyors.

Looking ahead, a net balance of 25% of professionals expect the number of house sales to increase over the next year, marking the strongest reading since February, the Royal Institution of Chartered Surveyors (Rics) said.

But its May survey also found that 26% of professionals reported seeing new buyer inquiries falling rather than rising, marking the fifth month in a row of decreases.

The figure is slightly less downbeat than seen in March and April, Rics said.

A net balance of 28% of professionals reported seeing the number of sales agreed falling. Sales volumes are generally expected to flatten out rather than fall in the three months ahead, the survey indicated.

House prices also appeared to be broadly flat, with a net balance of 8% of professionals reporting seeing prices fall rather than rise in May, which was slightly more than the balance of 3% who reported seeing this in April.

Over the next year, a balance of 34% of property professionals expect house prices to increase.

There were also signs of more choice for buyers. A net balance of 7% of surveyors saw a rise in new listings, marking the eleventh month of growth in a row.

Valuation activity also picked up, with 19% noting an increase in appraisals compared with a year ago, indicating a potentially more active summer market.

In the lettings sector, tenant demand strengthened in May, while instructions from landlords continued to dwindle. As a result, rents are expected to rise further in the near-term, the report said.

Rics chief economist, Simon Rubinsohn, said the Government’s affordable housing commitments “should provide greater certainty and support more strategic delivery”.

Rics senior economist, Tarrant Parsons, said: “Sentiment across the UK residential property market remains somewhat subdued, with ongoing uncertainty around global trade policies and the dampening effect of transactions being brought forward ahead of the stamp duty changes at the end of March continuing to weigh on buyer activity.

“However, near-term sales expectations are showing signs of stabilisation, suggesting that while muted conditions may persist in the short-term, a further deterioration appears unlikely. Looking ahead, the outlook is more optimistic, with respondents anticipating a gradual recovery in sales activity over the next 12 months.