The housing market remained weak in April, as global uncertainty weighed on buyer demand and sales, according to the latest index from the Royal Institution of Chartered Surveyors.
New buyer inquiries remained strongly negative in April, recording a net balance of -34%, meaning that more respondents reported a decrease in new inquiries rather than an increase.
However, the new Jupiter gauge improved slightly from the -40% recorded in March.
Agreed sales were also weak, with the net balance at -36% down, broadly unchanged from -35% previously.
the address House price The index fell to -34%, compared to -25% in March.
Sales forecasts for the next three months were at -32%, while twelve-month sales forecasts moved into negative territory at -6%.
Supply metrics were broadly flat, with new instructions recording a net balance of -3%.
The survey highlights the widening regional gap, with stronger downward pressure reported in London, the South East, East Anglia and the South West, while the North West and North England continued to record marginally positive readings.
Prices were still rising in Scotland and Northern Ireland.
Looking ahead, the near-term price outlook remains negative at -38%, although slightly less pessimistic than the March reading of -45%.
The rental market continues to show demand outpacing supply.
Tenant demand increased, with a net balance of +14%, while landlord instructions remained negative at -17%.
A net balance of +25% of respondents expect rents to rise in the coming months.
Tarrant Parsons, head of market research and analysis at REX, said: “April’s results show that the housing market remains in the grip of macro headwinds from the conflict in the Middle East.
“Recent warnings from the Bank of England that interest rate hikes may be necessary to address renewed inflation, driven by rising oil prices and disrupted supply chains, underscore the challenging environment facing buyers.
“Until there is a clearer path for inflation and borrowing costs, activity and sentiment look set to remain weak, particularly in southern England and London where affordability pressures are most acute.”
“Market activity had previously been supported not just by wage growth outpacing house prices, but by mortgage offers taken at more interest rates before the war in Iran started,” says Jeremy Liff, an estate agent in north London and former chairman of Rex Housing.
“However, these elements are now beginning to unravel as hostilities continue, and concerns about near-term interest rates and inflation are proving more important.
“The result is buyers and sellers returning to cautious mode. The volume of available inventory – particularly apartments – means buyers find themselves in a strong position.”
“Fortunately, relatively few previously agreed sales fall through although we are seeing more renegotiations and price cuts as sellers needing to move try to achieve their goals.”
Regarding rents, he adds: “The Tenants’ Bill of Rights has prompted some landlords to sell, but not as many as we feared.
“The resulting shortfall supports rents that would otherwise likely decline given continuing concerns about tenant affordability.
“Demand has improved slightly in the last month or so, but the high cost of living, partly due to the war in Iran, is often cited in our offices as a reason for not increasing rental offers significantly.”
