House sales fall in the region due to continuing uncertainty

The August 2019 RICS Residential Market Survey for the West Midlands points to a renewed deterioration in sales expectations, with survey respondents predicting a further decline in activity over the next three months.

Near term sales expectations actually fell from a net balance of plus 13 per cent to minus 11 per cent, representing the poorest return since March this year.

Furthermore, sales expectations have weakened in almost all parts of the UK over the past two months. Things are expected to improve, albeit only very modestly, at the 12-month horizon.

As positivity has leaked out of the market, August also saw fewer new properties being listed for sale as the net balance fell to minus 34 per cent from plus five per cent in July.

Unsurprisingly, with fewer new homes to sell the newly agreed sales series also saw falls, as more respondents reported a fall in the number of purchases over the course of the month.

Despite a fall in new properties for sale, the West Midlands saw a rise in the number of new would-be buyers taking an interest in properties across the region.

This rise in interest has seen respondents see growth in house prices across the region. However, looking ahead, the uncertainty cast by Brexit is leading to fewer respondents to the survey expecting prices to rise in the coming three months.

In the lettings market, the August results show tenant demand rose once again as more people are looking for new rental properties than the number of new ones being listed for rent. Given the consistent imbalance between rising demand and falling supply, rents are seen being squeezed higher over the next three months.

Simon Rubinsohn, RICS chief economist, said: “It is hard to get away from the shadow being cast over the housing market by the seemingly never-ending Brexit saga.

"Indeed, uncertainty is a theme that respondents continue to highlight as a negative influence on sentiment in survey after survey. That said, the key RICS activity indicators have actually remained relatively resilient until now pointing to only a modest dip in transactions across the country rather than anything more severe.

“More ominously, the August RICS results again draw attention to the challenge in the lettings market, with feedback continuing to indicate that demand is outstripping supply. As a result, the pressure is for rents to continue moving higher and indeed outstripping any price gains both in the near and medium term."