West Mids housing market waits for election result
The housing market is still on hold, pending election results, with the November 2019 RICS Residential Market Survey continuing to show a cautious approach from buyers and sellers in the West Midlands.
The latest set of results indicates that persistent economic and political uncertainty is deterring both buyers and vendors, and anecdotal commentary cites the General Election and Brexit as stifling activity.
New buyer enquiries remained flat in the region, after being in a general trend of decline for over a year. A decline in new buyer interest was seen at a headline UK level, and across all other UK regions. Newly agreed sales also continued to decline in the West Midlands, a pattern stretching back to January 2017.
There is change expected, however, post the election result in the region, with a net balance of 11% more respondents expecting sales levels to improve over the next three months, Sales expectations for the twelve-month outlook also remain strongly positive with a net balance +50% more agents in the region anticipating a rise in sales over the coming year (the highest reading since July 2015). Looking at regions individually, a solid increase in transactions over the next 12 months is expected across virtually all areas covered by this survey.
Prices are also expected to pick up over the next 12 months, with 40% more respondents in the region in the November survey anticipating house prices will rise (rather than fall) over the next twelve months. Significantly, prices are expected to return to growth across all areas of the UK with Wales and Northern Ireland leading the way.
Looking at prices in the current market in the West Midlands, respondents reported them being flat. The rest of the regional breakdown shows negative price trends across London, South East and East Anglia. Solid gains are still being reported across Northern Ireland and Wales.
In the lettings market, the latest numbers (which form part of the non-seasonally adjusted monthly series) show once again a decline in rental stock coming on the market, an ongoing theme over much of the last three years, against increasing tenant demand. On the back of this, rents are expected to rise modestly in the coming three months.
Simon Rubinsohn, RICS Chief Economist, said: “Confidence is critical to a well-functioning housing market and whatever happens in the general election today, it is important that the new government provides reassurance both over the stewardship of the economy and the ongoing challenges around Brexit which continues to highlighted in a disproportionate number of remarks made by respondents to the RICS survey.
Significantly despite the inevitable near term concerns, the feedback regarding the medium term view of the market remains surprisingly sanguine with the twelve month sales expectations indicator at its best level since the early part of 2017.”
