Government intervention needed to bring back housing market post-virus
The March 2020 RICS UK Residential Market Survey results highlight that despite the first few months of the year showing a marked pick-up in market activity, this month, as agents and the market go into lockdown, will have a significant impact on the outlook for the rest of 2020. See a summary below or go to downloads on this page and grab a full copy of the report.
The Key Findings
- Housing price expectations fall, but resilient at five-year measure.
- Housing market lockdown sees the lowest near-term sales expectations since 1998.
- Rents are seen falling in the coming months although longer-term sentiment is more resilient.
In March, after three successive months of increasing buyer enquiries, a net balance of -74% of UK respondents (estate agents) reported a fall in buyer demand – a sharp fall from +17% previously. Unsurprisingly, March also saw newly agreed sales drop across all parts of the UK with 69% more respondents reporting a fall – down from 19% reporting a rise in February.
Sales expectations for the next three months have also turned deeply negative following the lockdown measures, with a net balance of -92% of respondents representing the lowest reading since sales expectations were first recorded in the RICS Residential Market Survey. Looking forward to the next 12 months, respondents were slightly less negative, although 42% expected sales to fall further rather than rise.
Moving to the lettings market, March has seen new landlord instructions fall with -32% more respondents reporting a decline. Tenant demand across the UK flatlined as the virus had a significant impact on near-term rent expectations which slipped into negative territory for the first time since the financial crash.
Hew Edgar, RICS Head of Government Relations comments that while the UK’s health is the priority, the RICS survey feedback suggests that the Government will need to start considering medium and long-term measures that could assist a post-pandemic housing market. The RICS suggests that a stamp duty holiday could be one of the ways to reactivate the housing market quickly as a short term measure.
The Robert Bell & Company Team
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