The latest survey of RICS members across the UK also reveals that while the overall market outlook for the near term is still cautious, expectations point to a gradual improvement in activity and average prices over the next twelve months. The decision to extend the deadline for the UK’s withdrawal from the EU until the end of October seems to have spurred some buyers into action, albeit that a significant number of surveyors believe that the market will remain muted in terms of transaction numbers over the next quarter. In terms of values, 10 per cent of RICS members who contributed to the survey said that they observed a fall in property values in May, against 22 per cent of surveyors who observed a fall in values in April. This would suggest that the pace of price declines is easing, although the picture remains complex.
In some regions, such as Wales, the North and the Midlands, values continue to rise at significant levels, whilst in the South East, there is still a downwards pressure on values as sentiment remains circumspect.
By way of example, Ian Adams of Metropolis Surveyors in East Riding, Yorkshire observed: “Brexit so far isn’t impacting greatly in buyer confidence in the North, where most people buy properties to live in rather than as an investment.”
However, Dan Onion of Thomas Merrifield suggested his local market is more politically sensitive, and said: “The market in Oxford is still fairly active despite high prices relative to most parts of the UK.
“Forecasts for future value are very closely related to Brexit in my view – if we leave there is a real prospect of a 10 to 20 per cent fall, if we remain a five to 10 per cent rise.”
In London it’s yet a different story again, as Christopher Ames, of Ames Belgravia reflected on activity levels over the last few weeks.
He said: “Enquiries are picking up. The US Presidential visit seems to have reminded the world that the UK has strong ties with the USA as well as Europe. Dollar backed purchasers are still on the increase.”
With such a varied spectrum in terms of regional performance, RICS Chief Economist, Simon Rubinsohn, commented: “Some comfort can be drawn from the results of the latest RICS survey as it suggests that the housing market in aggregate may be steadying.
“However much of the anecdotal insight provided by respondents is still quite cautious, reflecting concerns about both the underlying political and economic climate.”
Simon added, “Another significant point made by respondents is that there continues to be considerable emphasis on the need for realistic pricing on the part of vendors, which while not a new story, is indicative of the ongoing challenges.”
The RICS report also includes findings on the continuing challenges within the private rental sector, which is seeing an exodus of landlords due to a double-whammy of rising taxation and changing legislation.
The latest data suggests that tenant demand increased slightly in May for the fifth month in a row, while at the same time, landlord instructions declined.
It’s this ongoing imbalance which has been a persistent theme over much of the past three years and means that rents are rising across all regions of the UK.
On this particular aspect, Simon Rubinsohn noted: “Meanwhile the lettings numbers are a source for some concern with rental expectations beginning to accelerate.”
Simon concluded: “It remains to be seen whether the pick-up indicated in our data materialises but the deterioration in the net return for landlords certainly provides a reason why, as it is a possible outcome of recent changes in the tax treatment of buy to let investments.”
Follow Louisa on Twitter: @louisafletcher