RICS housing survey shows increase in new buyers - but commercial survey finds retail sector ‘stuttering’

The number of new buyers looking to enter the housing market increased in March as the end of the government’s Stamp Duty holiday on homes up to £250,000 came to an end, according to the RICS’ latest Housing Market Survey.

It said that some 9% more surveyors reported increases in demand rather than decreases, up from 7% in February, representing the highest reading in almost two years.

But the barometer also warned that house prices were continuing to edge downward in all areas of the country except London, although the pace of the decline appeared to have slowed.

RICS chief economist Simon Rubinsohn drew a direct correlation between the end of the first-time-buyer Stamp Duty holiday and the “slight boost” reported in the survey.

“There has been a gentle increase in activity across the market in the early part of the year but it remains to be seen is whether this can continue, given the changes in the Budget and ongoing problems affecting the economy,” he said.

“London continues to outperform the rest of the UK in terms of prices but, interestingly, the North West did see an increase in activity in March.”

The survey found predictions for future prices across the UK remain flat for the second consecutive month, but 20% more surveyors expected sales to increase over the coming three months.

However, in the North, East Anglia and Scotland buyer-interest was seen as dropping.

Retail needs therapy

The RICS’ first-quarter Commercial Market Survey reported that demand for retail premises “continued to stutter” in the first three months of the year, which - coupled with growing availability - prompted a further drop in rental expectations.

Some 11% more respondents reported reduced demand on the previous quarter, mirrored by a 17% increase in the availability of unoccupied floorspace.

RICS said rental expectations for the retail sector were firmly negative with 28% more surveyors predicting falls rather than rises in rental values over the coming three months. Every region in the UK reported negative readings for rental predictions.

Surveyors reported that problems obtaining affordable finance as well as uncertainty over the economic outlook were holding back potential occupiers, and respondents in all regions reported falling development levels.

Rubinsohn said it remained to be seen whether the government’s just-announced response to the Portas Review would have any impact.