Low stock levels exacerbate market woes

Sales of houses continued to stagnate for the third successive month in March, according to RICS, with the number of properties coming on to the market across the UK also falling.

According to the RICS’ latest residential market report, estate agents have highlighted a new record low, with branches holding only 43 unsold properties on average.

There has been what RICS described as “waning interest” from prospective buyers, while the lack of supply in the market continued to underpin prices, with 22% more respondents seeing a rise over the last month across the UK.

Yet the difference between central London and the rest of the UK continued to widen, RICS said. “If figures from the capital are excluded from the headline figure, price growth in the UK has accelerated since December and price rises in the North West are particularly strong,” its report noted.

Prices in central London had progressively deteriorated and at around -49%, the net balance of respondents was the weakest since 2009. However RICS said that 14% more respondents from London anticipated prices would be higher in 12 months’ time.

Simon Rubinsohn, RICS’ chief economist, said: “The latest results for our survey show little change in the underlying picture surrounding both sales and markets. High-end sale properties in central London remain under pressure, while the wider residential market continues to be underpinned by a lack of stock.

“This includes rents, which away from the capital are generally moving higher as demand outstrips supply. For the time being it is hard to see any major impetus for change in the market, something also being reflected in the flat trend in transaction levels.”

RICS’ report found that sales rose “relatively firmly in Wales, Scotland and Northern Ireland”, and that going forward, “the national near-term sales outlook also appears somewhat subdued”.