Low stock and political uncertainty subdues residential property sector
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Record low stock numbers, political uncertainty and the aftermath of tax changes are obstacles hindering the West Midlands housing market, according to a new report.
The RICS UK Residential Market Survey concludes the various factors combined to subdue sales activity during July.
It said sales activity continued to lack momentum, with the net balance between buyer enquiries and agreed sales remaining negative, at -14% and -17%, respectively.
Importantly, respondents are not anticipating any pick up any time soon, with both three-month and twelve-month expectations both negative.
RICS said the main element holding back the market continued to be a sustained deterioration in the flow of new listings, with new instructions dwindling for the 21st consecutive month last month.
Consequently, average stock levels on estate agents’ books remain close to record lows, limiting choice for potential home buyers.
Despite turbulent sales activity, the headline price growth gauge for the West Midlands continues to defy the UK trend with 35% more respondents reporting prices rising rather than falling over the previous three months. During the same period, the national figure slipped from +7% to +1% and represented the softest reading since early 2013.
In the lettings market, the quarterly figures also portray a more subdued picture with tenant demand in the region more or less flat.
Meanwhile landlord instructions returned to positive territory for the first time in five consecutive quarters. However, a sustained lack of supply means rents are still expected to grow steadily in the coming three months. Looking further ahead, they are projected to increase by a little over 2% on average over the next twelve months.
John Andrews, of Stourport agency, Doolittle & Dalley said: “A steady market as holiday season progresses. However, there is a shortage of new property coming for sale and enquiry levels are lower than in the previous months.”
Stephen Smith, of Walsall agency, Fraser Wood said: “Sellers expectations in most instances are higher than what the market is currently producing. There is a lack of new instructions coming onto the market and this is leading to a slowdown in the number of buyer enquiries.”