12 Apr 2018
After the release of the latest UK Residential Market Survey, we take a closer look at the markets in Northern Ireland, Scotland and Wales.
Survey in brief
- Northern Ireland house prices pick up but sales and buyer interest go lower
- Residential demand flat in Scotland while shortages of homes for sale continues
- Strong first quarter for Welsh housing market despite sales blip in March with the bad weather
Northern Ireland saw amongst the strongest pick up in house prices across the UK in the first quarter of the year, according to the latest RICS (Royal Institution of Chartered Surveyors) and Ulster Bank UK Residential Market Survey.
However, the latest survey points to newly agreed sales and demand for property in the form of new buyer enquiries both easing, with the unseasonably bad weather last month potentially a factor.
The number of surveyors saying that prices had risen in Northern Ireland in the past three months was the highest in the UK and expectations for prices also remain positive but outlook around sales is flat, according to respondents.
New instructions to sell saw an increase in March indicating that the number of people putting their properties on the market edge upwards, however this comes off a low base
There is continued upward pressure on prices with the lack of supply a factor, albeit that there has been a modest pick-up in but the number of properties coming onto the market. For the second month in a row, the survey indicates that there has been a dip in new buyer enquiries, but this is likely, at least to some extent, to reflect the particularly bad weather we had in March. That said, the economic and political environment is not short of uncertainty, which could be causing some people to pause regarding their homebuying intentions. But whilst sales expectations for the next three months are flat, price expectations remain positive, which indicates that surveyors think prices will continue to edge upwards. Looking ahead to the next 12 months, there is a reasonable amount of confidence among surveyors for an increase in sales and prices.
The first quarter of the year has probably been a stronger one for the housing market than some had predicted, as it has been for the economy as a whole, and we have seen good mortgage demand as a result. It’s positive news for those who are seeking to buy or move home that surveyors are experiencing more properties coming onto the market, and with better weather later spring we would anticipate an uplift in mortgage applications.
Lack of supply continues to push up prices in the Scottish housing market and slow down demand, according to the latest RICS (Royal Institution of Chartered Surveyors) UK Residential Market Survey.
Demand was flat in Scotland along with agreed sales in March 2018. Impacting these two indicators is the lack of supply in the Scottish residential market, exemplified by anecdotal evidence, as well as the new sales instructions indicator. In Scotland, the number of new properties coming on to the market has been falling for a year, with 10% more respondents observing new sales instructions falling (rather than rising) in March.
This lack of supply is a key factor affecting affordability, with respondents noting that the continued shortage of stock is driving up prices. In March, 30% more respondents noted an increase (rather than decrease) in prices at the headline level. Prices are anticipated to continue to rise over the near term too, with a net balance of +30% contributors, expecting growth over the next three months.
Moving to sales expectations, respondents are optimistic about near term sales with nearly a third (30%) also anticipating sales to grow over the next three months in Scotland. The picture for sales over the year ahead in Scotland is also optimistic with a net balance of +52% of contributors anticipating an increase in sales over the next twelve months.
The unseasonably bad weather impacted on activity in the Welsh housing market in March, with the number of newly agreed sales being lower than in the previous month, according to the latest RICS (Royal Institution of Chartered Surveyors) UK Residential Market Survey.
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.
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.
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