Housing market in North West has ground to complete standstill
The housing market in the North West has come to a complete standstill over the last month.
The March 2020 RICS UK Residential Market Survey results highlight that despite the first few months of the year showing a marked pick-up in market activity, March will have a significant impact on the outlook for the rest of the year.
In March, after four successive months of increasing buyer enquiries, a net balance of -89% of respondents reported a fall in buyer demand.
Unsurprisingly, March also saw newly agreed sales drop across the region with 74% more respondents reporting a fall – down from 11% reporting a rise in February.
New homes coming onto the market also dropped sharply over the past month, with a net balance of -86% of respondents reporting a fall.
Looking ahead, two thirds of the North West respondents don’t expect sales to rise for the next three months, a net balance of -66%.
This is the lowest net balance ever seen in the survey since it began. The longer term outlook improves slightly, as looking forward to the next 12 months, 43% expect sales to fall rather than rise.
North West house prices rose in March, as 21% of participants reported a rise, albeit down from +35% in February.
Because of the restrictions placed on the market, 70% of respondents anticipate house prices across the region to fall in the coming three month. Despite respondents now expecting prices to fall over the coming twelve months, the net balance is less weak than the three month outlook with 24% expecting price reductions at the 12 month mark.
The North West lettings market has seen new landlord instructions fall with -33% more respondents reporting a decline. Tenant demand rose in March but at a slower pace than in February. The impact of the virus leads respondents to believe rents will fall in the coming three months.
Simon Rubinsohn, RICS Chief Economist, said: “The results of the latest RICS survey capture the period during which the economy moved into lockdown so show a somewhat mixed picture. But critically, the key forward looking indicators clearly reflect the emergency measures in place. The fact that responses are negative not just at the three but also the twelve month time horizon is significant in suggesting that the legacy of covid-19 could be such that any return to what might be described as ‘normality’ in the economy will take time and households will remain cautious for a while.
“Of course, the primary focus of government is at this stage the health of the nation and defeating coronavirus and it may be a little premature to be planning for the economic recovery. However, the feedback from the survey does imply that further government interventions both in the wider economy and more specifically in the housing market may be necessary to aid this process supporting businesses and people back into work.”