Region’s housing market fails to pick up

Despite Spring usually being the start of the busy period for Yorkshire and Humber’s housing sales market, new buyer enquiries, agreed sales and new instructions all failed to pick-up last month.

According to the monthly RICS UK Residential Market Survey, the lack of homes on Yorkshire and Humber’s sales market continued to decline, with agents reporting a modest average of 32 homes on their sales books as interest from would-be buyers continued to wane, resulting in 29% more contributors seeing a fall in agreed sales last month.

Comparatively, in May 2016 – one month prior to the referendum poll – agents had an average of 53 homes for sale on their books, yet they have not managed to surpass this amount in the last three years, with the average number of homes either falling or remaining the same each month since May 2016.

House prices remained flat in the region during May, and just 8% of respondents expect to see a rise in house prices over the coming year ahead (compared with 23% in April). Sales expectations are also gloomy, with 27% of contributors expecting to see a further fall in sales over the coming three months, and 23% anticipating sales levels will continue to fall over the next 12-months.

In the lettings market, tenant demand slightly decreased, with 15% of letting agents in the region reporting a rise in demand from rental tenants – down from 17% (non-seasonally adjusted data). At the same time, landlord instructions declined – a persistent theme over much of the past three years – with 28% of contributors seeing a fall in new properties to rent (down from 17%).

Given this imbalance, near term rental expectations are now more elevated, with rents seen rising across all regions/countries of the UK and 41% of letting agents in Yorkshire and Humber expecting to see rents rise over the coming three months.  This could also be partly to do with changes in the rental market with regard to fees, but that remains to be seen.

Simon Rubinsohn, RICS chief economist, said: “Some comfort can be drawn from the results of the latest RICS survey which suggest that the housing market in aggregate may be steading. However much of the anecdotal insight provided by respondents is still quite cautious which reflects concerns both about the underlying political and economic climate. Significantly, there continues to be considerable emphasis on the need for realistic pricing on the part of vendors which while not a new story, is indicative of the ongoing challenges in the sector.

“Meanwhile the lettings numbers are a source for some concern with rental expectations beginning to accelerate. It remains to be seen whether the pick-up indicated in our data materialises but the deterioration in the net return for landlords certainly provides reason why it is a possible outcome of recent changes in the tax treatment of buy to let investments.”