More homes came onto the market in Wales during September according to the latest Royal Institution of Chartered Surveyors (RICS) Residential Market Survey. However, surveyors report that prices and sales continued to fall.
A net balance of 11% of Welsh surveyors reported a rise in new instructions to sell during the month. This is up from -45% in August, and -12% in July.
In terms of demand, new buyer enquiries continued to fall though, but at a more modest rate than has been seen previously. A net balance of -37% of respondents reported a decline, this is compared to -65% in August, and -43% in July.
Regarding sales, a net balance of -48% of respondents reported a fall in newly agreed sales through August. However, looking forward, surveyors are more optimistic about the three-month sales outlook than previously. Although a net balance of -13% of respondents anticipate a fall in sales, this is up from -41% and -33% than in the two most recent surveys.
Looking at pricing over the past three months, a net balance of -63% of Welsh respondents reported that prices had declined. This is the lowest the price balance has been in over a decade. It is above the UK average though, which sits at -69%.
In terms of the outlook for prices, a net balance of -57% of Welsh respondents anticipate that prices will fall over the next quarter, up from -75% the month previous.
The lettings market is in sharp contrast to sales, and demand is continuing to rise. A net balance of 43% of survey participants in Wales saw an increase in tenant demand in the lettings market in September. Meanwhile, the feedback around landlord instructions continues to highlight a scarcity of listings becoming available on the rental market (-43%). Given this backdrop, rents are expected to be pushed higher, with a net balance of 71% of Welsh respondents pencilling growth in rental prices over the next three months.
Paul Lucas FRICS of R.K.Lucas & Son in Haverfordwest commented:
“The sales market continues to slow. Buyers are reluctant to enter the mortgage market in the current economic climate of uncertainty.”
Sam Burston of David James in Monmouth added:
“Market conditions are surprisingly resilient. When vendors react to the market and take their agents advice in adjusting price or considering offers, they are successful. Those vendors who are holding out for top prices do so at their detriment, ultimately having to reduce prices more aggressively.”
Commenting on the rental market, Anthony Filice FRICS of Kelvin Francis Ltd. in Cardiff said:
“Reducing numbers of properties to rent, through landlords exiting the market, causing upward inflation of rents. Demand high and full rental figures transpiring as a result.”
Commenting on the UK picture, Tarrant Parsons, Senior Economist at RICS, said:
“With mortgage affordability still incredibly stretched, it is unsurprising that buyer activity across the housing market remained subdued in September. Although the decision to pause monetary policy tightening a few weeks ago provided a glimmer of relief for the market, interest rates are likely now set to remain on hold for a prolonged period. As such, it appears there is little prospect of trends deviating much from the recent picture in the immediate future. That said, the outlook a little further ahead has improved slightly, with twelve-month sales expectations moving out of negative territory for the first time in several reports.”