Housing market continues to decline as sales dry up

The residential housing market across the West Midlands has continued to see a decline in sales activity in the run up to Christmas.

The November RICS UK Residential Market Survey shows both agreed sales and expected sales remain in negative territory.

With both the current sales picture and the short term outlook for other activity remaining negative, surveyors are unconvinced that the market is going to gain any momentum in the coming months.

A lack of new properties coming to market is continuing to dampen the West Midlands market. RICS said 38% more respondents to the survey saw a decline rather than rise in new instructions in November – a pattern now repeated across 26th consecutive months.

Nevertheless, in part driven by the slower pace of sales, stock levels on estate agents’ books held broadly steady.

To give some idea of the future of new instructions coming on to the market, contributors were asked to compare the number of appraisals undertaken in November with the same period last year. Nationally, the largest share of respondents (49%) noted appraisals were lower, while only 15% said they were higher on a like for like basis. RICS said this did not bode particularly well for the new instructions pipeline.

The shortage of stock coming to the West Midlands market also continues to impact new buyer interest, which remained flat in November.

Newly-agreed sales continued to edge lower at the regional level with 27% more respondents seeing a fall rather than rise, compared with -16% in October.

Commenting, Richard Franklin, MRICS of Franklin Gallimore in Tenbury Wells, said he believed would-be vendors were “watching from the touch-lines due to macro-economic uncertainty caused by a lack of clarity over Brexit”.

Stephen Smith, MRICS of Fraser Wood in Walsall, said: “The pre-Christmas lull started early with sellers putting off placing properties on the market, unless the need to.”

The subdued picture in supply and new instructions continues to underpin price growth across the region this month, with 24% more respondents seeing prices rise over the past three months.

The West Midlands continues to display a relatively strong price picture in comparison to other regions.

Looking forward, RICS said the three month price expectations for the West Midlands were more or less flat as the net balance moved to +7% from -9% in October.

In the lettings market, interest from prospective tenants fell back (on a non-seasonally adjusted basis) for the second consecutive month, with the net balance coming in at -26%. Alongside this, new landlord instructions continued to decline.

Mike Arthan, FRICS of Barbers in Shropshire, said: “There is nowhere near enough new stock coming onto the market to replace recent sales.”