UK HOUSE 4

The number of house sales in the UK declined in December, and predictions for expected new sales over the next three months were also pared back, according to the RICS December 2016 UK Residential Market Survey.

While it remains to be seen if this is a temporary setback, 1% more chartered surveyors saw a fall rather than a rise in sales last month, and figures for predicted sales over the next three months across the UK also saw a noticeable slow down with only 4% more respondents anticipating an increase in sales during the coming three months down from 18% previously.

However, some parts of the UK reported a rise in sales over December, with Wales, the South West, and the North East all seeing an increase.

Supporting the predicted slow start to 2017, the survey showed that the number of new house buyers rose only marginally in December following much stronger figures for the previous four months (+7% net balance). New instructions to sell also failed to see any pick-up, marking the tenth straight month without any improvement (0% net balance).

Respondents to the survey continue to highlight low stock levels as a key concern and a lack of choice for would-be buyers is weighing heavily on the UK housing market.

However, in the longer term, the twelve month sales outlook is positive with 32% more contributors expecting sales to rise (rather than fall) over the year ahead, compared with 31% in the November survey. Looking at the differing markets within the UK, Scotland and Northern Ireland saw the strongest twelve month expectations, although figures are in positive territory across all parts of the UK.

Looking at the continued growth in house prices, 24% more chartered surveyors saw a rise rather than fall in prices in December, from +29% in November. Although this suggests prices are still rising firmly, the latest figure does end a run of four successive months of higher house price balances. Regionally, Central London is the only area where in which prices are falling with the price indicator having remained in negative territory for ten consecutive months.

At the other end of the scale, respondents in the North West reported the strongest price growth with 55% more respondents noting an increase in prices (rather than a decline) in December.

Prices expectations for the next three months (+12 net balance) suggest that immediate price pressures may be easing slightly, however, over the next 12 months 49% more respondents suggest that prices will increase. All parts of the UK are expected to see higher prices over the year, although expectations remain relatively subdued in Central London.

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