Housing demand and sales remain in doldrums but decline stabilises, RICS says

Demand for new homes and sales have stabilised but remain deep in negative territory, according to the Royal Institution of Chartered Surveyors (RICS).

The institution’s latest UK Residential Market Survey shows new buyer enquiries recorded a net balance of -34% in May, unchanged from the previous month. The ‘net balance’ refers to the proportion of respondents reporting a rise in a metric minus those reporting a fall.

It marks the first time since January that the headline demand indicator has not worsened.

Agreed sales posting an unchanged net balance of -37%.

RICS said that although this shows that “more respondents are still seeing sales fall rather than rise”, the unchanged reading “suggests the pace of decline is no longer intensifying”.

However, transactions are taking longer to complete. The average time from listing to completion rose to 21.5 weeks, the longest duration recorded since the dataset began in 2017.

Looking ahead, short-term sentiment remains cautious. Near-term sales expectations improved slightly to -25%, compared with readings of -32% and -34% in the previous two reports.

Tarrant Parsons, RICS Head of Market Research and Analysis, said: “The latest survey data suggest the recent downturn in activity may be beginning to stabilise, with several key indicators broadly holding steady. However, as they remain in negative territory, it would be premature to interpret this as the start of a recovery.

“The decline in CPI inflation to 2.8% in April provided some temporary relief, but the Bank of England has signalled that further inflationary pressures are likely as higher energy costs continue to pass through. Against this backdrop, the prospect of further rate rises cannot be dismissed, and until there is greater clarity, market sentiment is likely to remain fragile.”