The unseasonably bad weather impacted on activity in the Welsh housing market in March, the latest RICS (Royal Institution of Chartered Surveyors) Residential Market Survey suggests, with the number newly agreed sales being lower than in the previous month.
However, the overall trajectory of the housing market in Wales was upwards in the first quarter of the year, with prices and sales rising above the UK average rate, and expectations for both prices and sales activity remaining relatively strong.
A net balance of +36 percent of Welsh respondents to the latest survey said that house prices rose in the past three months, with a net balance of +15 percent expecting values to be higher again in three months’ time. In terms of the outlook for sales activity, whilst the indicator for newly agreed sales in March eased back, a net balance of +25 percent expects an increase activity in the April to June period.
Indeed, the indicator for sales expectations strengthened, suggesting that respondents expect any lost activity in March due to the weather to be made up.
RICS Residential Spokesperson for Wales, and Director of Kelvin Francis, Cardiff, Tony Filice FRICS, says: “Overall, the first quarter of the year was a relatively busy one, albeit that the weather had some impact on activity in early March. In our experience, though, the two weeks prior to Easter saw a pickup in activity, with a higher level of viewings and offers received. Looking ahead, the expectation is that sales will increase between April and June, however, it remains to be seen what impact if any the replacement of Stamp Duty with the Land Transaction Tax will have on activity in some parts of the market.”
RICS Policy Manager in Wales, David Morgan, said:
“With the recent changes to the tax regime coming into force at the beginning of April, there is some evidence that buyers looking to the middle to upper price brackets were trying to squeeze in a house purchase before their tax liability increased.”
“In assessing the bands and thresholds of the incoming regime, it is clear that the Welsh Government’s objective is to support first time buyers and those operating in the lower end of the market. Whilst this objective is commendable, the progressively higher tax liability of middle to upper priced houses may reduce purchases in that market area which could, ultimately, negatively impact activity across the housing market in Wales,”
The main findings of the survey were as follows:
The headline price balance for Wales was +36% in the latest survey, meaning that 36% more surveyors said that prices rose in the past three months than those who said they fell.
The price expectations balance, at +29% is amongst the highest of all UK regions. The sales expectations balance at +25% also remains firmly in positive territory.
The new instructions to sell balance was at +2%, suggesting that the number of new properties coming onto the market was broadly flat in March.
Meanwhile, the newly agreed sales balance was at -5% suggesting that the number of newly agree sales eased back in March – albeit that anecdotally respondents suggest that the later part of the month saw more activity.