Sluggish start to year for region’s housing market

The region’s housing market has suffered a slow start to the year as enquiries, sales and new instructions all fell further in January.

The latest RICS UK Residential Market Survey attributed the decline to concerns over the potential impact of Brexit, alongside affordability constraints continuing to cause hesitation amongst buyers and sellers.

During January, new buyer enquiries fell again at the headline level marking the fifth successive monthly decline.

Alongside weakening demand, the number of new properties being listed on the West Midlands’ sales market also deteriorated, with the net balance reading of -28%.

Rounding off a subdued month for market activity, agreed sales in the region also fell further, with the pace of decline gathering momentum compared to December.

Looking ahead, sales expectations for the coming three months remain downbeat but the outlook over the next 12 months is stronger, say contributors to the survey, with +24% expecting sales to rise.

Across the lettings market, tenant demand fell in the three months to January (seasonally adjusted series).

In the West Midlands new landlord instructions dwindled, remaining in negative territory for a sixth successive quarter.  Nationally, respondents expect rents to rise by roughly 2% over the next 12 months, and at the five year horizon, averaging 3% a year.

Simon Rubinsohn, RICS chief economist, said: “Although some contributors to the survey have taken comfort from a better start to the year than anticipated, a larger proportion are continuing to find the market a difficult one in which to do business. Resolution of the Brexit negotiations is widely seen as critical to encouraging potential buyers back into the market although whether that will be sufficient in London and parts of the South East where affordability remains stretched and the tax changes are most penal remains to be seen.

“Meanwhile, the lettings market is continuing to see instructions fall away as investors respond to the emerging fiscal and regulatory landscape. This is resulting in feedback consistent with further increases in rents across the country, to a greater or lesser degree, over the next twelve months.”

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