Housing market shows signs of improvement

According to the RICS Residential Market Survey for July, demand for rental properties in the region picked-up to post the strongest reading since the beginning of 2018 and landlord instructions fell once again, extending a run of continuous decline stretching back over the past 12 quarters.

Near term rental growth expectations were therefore driven up, with the net balance of plus 55 per cent in July representing the most elevated reading in 11 quarters, and the UK.

In more positive news, the West Midlands’ sales market hasn’t been drastically impacted by the introduction of new government. This month, six per cent more respondents saw a rise rather than fall in enquiries from new buyers in July. This marks the first month of positive growth in interest from would-be buyers since September 2018.

While buyers seem to be picking up, newly agreed sales also improved in July.

The net balance rose to plus 24 per cent, from minus 14 per cent in June. Some areas did see a stronger sales trend, in a slightly mixed regional picture, with only respondents in the region and the North East reporting a reasonably solid pick-up during July. Looking at the picture ahead, near term predicted sales also picked up, with a net balance of plus 20 per cent.

Again, while new buyer enquiries are picking up, the number of new properties being listed for sale also improved. This follows a string of 13 consecutive monthly declines in fresh listings. It seems there is little prospect of a sustained rise in supply coming onto the market in the immediate future.

Price wise, 21 per cent more respondents in the West Midlands reported price rises across the region. Elsewhere, prices were seen to be rising at a solid pace in Northern Ireland, Scotland and Wales. But prices continue to fall in London, the South East and East Anglia.

Simon Rubinsohn, RICS chief economist, said: “The latest RICS results will provide little comfort for the market with all the key indicators pretty much flatlining.

"Indeed, the forward-looking metrics on prices and sales also seem to losing momentum as concerns, clearly voiced in the anecdotal feedback, both about Brexit and political uncertainty heighten.

"Some support may be provided by an easing in the cost of money which could feed through into lower mortgage finance costs, but this may be insufficient to provide a spur to lift activity given the clouds hanging over the economy.

“Meanwhile, the lettings market data continues to send a very strong message that institutions need to upscale their build to rent pipeline to address the shortfall resulting from the decline in appetite from buy to let investors. It is significant that the near-term rental expectations indicator has climbed to a three-year high.”