A net balance of 20% of professionals expect to see a recovery in home sales over the next three months, marking the highest level of sales expectations since January 2022, the Royal Institution of Chartered Surveyors said
Property professionals’ expectations for an uplift in house sales are at their strongest level since the start of 2022, according to surveyors.
A net balance of 20% of professionals expect to see a recovery in home sales over the next three months, marking the highest level of sales expectations since January 2022, the Royal Institution of Chartered Surveyors (Rics) said. However, a balance of 54% of professionals in the June survey expect house prices to be higher in a year’s time, which Rics said highlights a key challenge for the new Government, as boosting the supply of homes “will not be an easy task”.
Britain’s biggest banks have been cutting mortgage rates in recent days. Economists have predicted that the Bank of England base rate could be cut from its 16-year high of 5.25% to 5% at the next vote on August 1. Tarrant Parsons, Rics senior economist, said: “Although activity across the housing market remained subdued last month, forward looking aspects did improve slightly.”
“There are some factors emerging now that could support a recovery in the months ahead. If the Bank of England does decide that the current inflation backdrop is benign enough to start loosening monetary policy next month, this may prompt a further softening in lending rates. In addition, the recent election delivered a clear outcome, with housing pushed up the political agenda.”
Looking at the rental market, a net balance of 28% of professionals saw a pick-up in tenant demand in June. Meanwhile, a net balance of 11% saw a fall in new landlord instructions, pointing to a renewed decline in new rental listings.
Looking forward, a net balance of 38% of professionals expect rental prices to rise over the next three months. Sarah Coles, head of personal finance at Hargreaves Lansdown, said: “Before the election, June brought more of the bad news the market has been used to seeing with falling sales and prices, and dwindling buyer numbers.”
“Things were so miserable that even the number of new sellers fell back. It wasn’t helped by stubbornly high mortgage rates, with Moneyfacts figures showing the average two-year fixed rate remained just shy of 6% for most of the month. July may hold more hope, in part because of the election result, and the arrival of a new government.”
She said: “Agents are holding out hope for an upswing in consumer sentiment, buoyed by the optimism that a change at the top can engender, and hope that life in general will change for the better. We will have to see whether this materialises, and encourages more enthusiastic buyers into the market in the weeks to come.”
The report was released as Barclays said data from its current accounts indicated that spending on rent and mortgages increased by 1.5% annually in June, slowing from May’s uplift of 6.3%. It was the lowest rate of growth since March 2023. But the cold and dull weather at the start of June caused people to delay sprucing up their homes and gardens. Spending on home improvements and DIY category fell by 9.4% annually, and garden centre spending was down by 12.7%.
The data was sourced from transactions identified by Barclays as direct debits and bank transfers going to multiple mortgage lenders and private landlords. An Opinium Research survey of 2,000 people across the UK in June for Barclays found that 73% feel optimistic about their ability to live within their means.
Mark Arnold, head of savings and mortgages at Barclays, said: “Our latest spending figures paint an encouraging picture for UK consumers rent and mortgage payments are stabilising, energy bills are coming down, and confidence is on the up. However, we’re yet to see this translate into spending on sprucing up homes and gardens, with most household categories still in decline. Now that summer has arrived, retailers will be hoping that the warmer weather can unlock that pent-up demand.”
TV property expert Phil Spencer said: “With fierce competition for accommodation, renters should think carefully about how to make their application stand out if they want to secure their non-negotiables, such as a private garden or a parking space.”
“Similarly, landlords face competition when it comes to appealing to top-tier renters, who can offer more than simply matching the asking price a little investment now to secure stable, long-term tenants could pay off if it means spending less money down the line on repairs and having fewer gaps between occupants.”
