Housing market slowdown forecast by RICS

THE North West’s housing market may be set for a slow-down over the next three months, following a short-term rush on buy-to-let properties, the latest survey from RICS (Royal Institution of Chartered Surveyors) has revealed.

The Royal Institution of Chartered Surveyors  survey revealed that respondents expected there to be a rush on buy-to-let purchases ahead of stamp duty increases coming into effect this April, and that the past three months have proved particularly healthy for sales activity in the North West.

North West agents sold an average of 23 homes over the past three months (December 2015 to February 2016). This is the third highest result of all UK regions – agents in the East Midlands sold the most during the same time period – 33, followed by agents in Yorkshire and Humber who sold 24 homes each during December to February.
 
Comparatively, agents in the West Midlands sold 19 homes over the same time period, whilst South East agents sold 17, and London agents sold the least – 10 – homes over the past three months.
 
However, only 25% of chartered surveyors in the North West expect to see an increase in sales activity over the coming three months.

In addition, while house price inflation expectations peaked following the Chancellor’s Autumn Statement, with prices driven by speculation regarding an increase in investor demand; this trend is set to soften slightly from March as investor interest dampens.

Some 40% of respondents in the North West expect prices to increase albeit modestly over the coming months.
 
The survey showed that house prices rose in February throughout most UK regions including the North West where 53% of chartered surveyors reported seeing rises in house prices.

East Anglia showed the sharpest price increases with 91% of respondents in the area saying prices had risen over the past month. London and the North East by way of contrast saw very modest gains.
 
Derek Coates, of Venmores in Liverpool, said: “The start of the year continues to be very busy although there is a shortage of properties coming on to the market with the resulting upward pressure on prices.”
 
RICS chief economist, Simon Rubinsohn, said: “Over the past three months, we have witnessed a surge in buy-to-let activity.

“Since the Chancellor made his Autumn Statement announcement last November, investors have rushed to purchase homes before the Stamp Duty surcharge comes into effect. It is inevitable that over the coming months, April’s Stamp Duty changes will take a little of the heat out of the investor market.  

“While there remain significant doubts as to whether the Government’s plans to encourage a more robust development and construction pipeline will be sufficient to address the housing crisis, long-term price indications for the housing market remain strong, with respondents still expecting prices to continue to rise over the next five years.”