West Midlands housing market set for cooling down
THE housing market in the West Midlands could be set for a major cooling down, according to a new report from property organisation, the Royal Institution of Chartered Surveyors.
In its latest Residential Market Survey, RICS said the number of house sales in the West Midlands faltered in December and expectations now are that this trend will continue for the first quarter.
RICS said it remained to be seen if this was a temporary setback, but it added that 20% more chartered surveyors saw a fall (rather than a rise) in sales last month, and figures for predicted sales over the next three month across the region were also showing a noticeable slow down.
It said the flattening of sales in the near term could be related back to the lack of stock in surveyor’s portfolios.
New instructions once again failed to see any pick-up, with 21% more chartered surveyors reporting a fall instead of a rise. That said, new buyer enquiries rose for the second month in a row with 17% more respondents reporting an increase in interest.
Nevertheless, RICS said this continued reference to low stock levels was a key concern for contributors and a lack of choice for would-be buyers appeared to be weighing heavily on activity.
The 12-month sales outlook for the region remains positive with 42% more contributors expecting sales to rise over the year ahead, compared with 27% in the November survey.
Looking at house prices for December, a net balance of 33% of chartered surveyors reported a rise, up 57% in November. Although this measure suggests prices are rising relatively firmly in the region, RICS said the latest reading ended a run of five successive months of higher house price balances.
Simon Rubinsohn, RICS Chief Economist, said: “A familiar story relating to supply continues to drive both the sales and lettings markets impacting on activity, prices and rents. The eagerly awaited housing white paper should help to create a more positive framework for new build delivery but with the best will in the world, it is going to take time before the resulting uplift in the development pipeline begins to impact on the opportunities for either homebuyers or tenants.
Jeremy Dell, of J J Dell & Co in Oswestry, said: “December was slow on vendor instructions resulting in the lack of choice for purchasers. The start of 2017 could be quite difficult with the continued shortage of properties coming onto the market.”
In the West Midlands’ lettings market demand continued to outpace supply. Increases in tenant demand remained strong with 29% more chartered surveyors reporting a rise instead of a fall. Despite 5% of respondents reporting a rise in new instructions, rents are being squeezed with 46% of respondents anticipating rents to rise in the coming three months.
Colin Townsend, of John Goodwin in Malvern, said: “A shortage of instructions and the continuing high tenant demand indicates that 2017 will see rents continuing their upward path.”
