Brexit impasse continues to challenge North West’s housing market

The North West’s housing market was still subdued in March, with the volume of sales, new buyer enquiries and sales instructions all falling last month, according to the RICS (Royal Institution of Chartered Surveyors) UK Residential Market Survey, March 2019.

In March 20% of the North West’s agents saw a fall in sales – up from 4% in February – as buyer enquiries failed to pick up. Comparatively, the survey revealed that demand fell across all parts of the UK in March.

Looking ahead, 33% of agents in the North West expect to see sales levels fall further over the coming three months, while a more modest 17% expect to see sales increase over the next 12-months.

Despite a reduction in sales, the ongoing decline in homes coming onto the sales market in the North West continues and is resulting in stock levels on estate agents’ books remaining relatively low, at an average of 46 properties per branch.

Looking at prices, more respondents did not report a rise in house prices last month, but 46% expect prices to rise over the coming 12 months.

In comparison, London and the South East continue to display the weakest sentiment regarding prices, with Scotland and Northern Ireland the only parts of the UK to have seen sustained price growth on a consistent basis over the past two months.

Looking ahead, at the national level, 15% more respondents anticipate house prices will be higher in 12 months’ time.

John Halman, of Gascoigne Halman in Wilmslow, said: “Sadly with the ongoing Brexit saga not being achieved we have seen a drop in valuations and sales at a time of year when we would normally expect activity to be rising.”

In the North West’s lettings market, demand from tenants rose, with 44% of agents reporting a rise in tenant demand (non-seasonally adjusted data), while 33% reported a fall in landlord instructions.

On the back of this, 13% of contributors expect rents to grow over the coming three months.

Richard Powell, of Ryder & Dutton in Oldham, said: “There has been a substantial increase in landlords selling up mainly due to tax changes.”

Commenting on the survey findings, Simon Rubinsohn, RICS chief economist, said: “Brexit remains a major drag on activity in the market with anecdotal evidence pointing to potential buyers being reluctant to commit in the face of the heightened sense of uncertainty.

“Whether any deal provides the shift in mood music envisaged by many respondents to the survey remains to be seen, but as things stand there is little encouragement to be drawn from key RICS lead indicators.

“We expect transactions to decline on this basis.”

He added: “Arguably more significant still are the signs that developers are continuing to adopt a more cautious stance with the trend in new residential starts now flatlining.

“Against this backdrop there is little possibility of delivering the uplift in supply necessary to address the ongoing housing crisis.”