House buying activity drops amid price increases in Yorkshire
Yorkshire and Humber’s housing market lacked momentum in September, as demand from new buyers and sales fell, and the shift in interest rate expectations contributed to buyer caution slowing the market, according to the September RICS (Royal Institution of Chartered Surveyors) UK Residential Market Survey.
Last month, surveyors in Yorkshire and Humber did not report any rises in demand from would-be buyers, and alongside this only 1% of respondents reported an increase in agreed sales. The survey revealed that weakness in sales transactions was widespread across most of the UK’s 12 regions during September. In fact, only Wales and the South West were cited to have seen an increase in sales, while all other parts of the UK saw sales transactions fall.
However, looking ahead to the next three months, 19% of the region’s surveyors expect sales transactions to increase (up from 17% in August).
A lack of stock is still an obstacle hindering sales activity in Yorkshire and Humber and respondents reported a decline once again in the number of instructions (new homes coming on to the market) during September. Agents in the region also reported an average of 45 homes on their books, which is a record low.
This lack of housing stock led to prices edging up higher in some parts of Yorkshire and Humber last month, with 27% of respondents reporting a rise in prices, up from 26% back in August. But looking ahead to the next three months, only 10% of Yorkshire and Humber’s surveyors expect to see prices rise further.
Alex McNeil, MRICS of Bramleys in Huddersfield said: “The market remains subdued primarily as a result of there being limited new stock becoming available over a sustained period of time. There remains an overall satisfactory level of demand from would-be-buyers, and there is a feeling that there is a latent demand building.”
Simon Rubinsohn, RICS Chief Economist commented: “It was always questionable to talk about the housing market as a single entity but the stark divergence in key readings from the latest RICS survey demonstrates in the clearest possible terms just how important the regional narrative is at the present time. In part, this is a reflection of affordability constraints hitting the higher priced segments of the market. It is perhaps also indicative of a shift in economic momentum in the face of the increasing possibility of the first hike in base rates in over ten years.
“That said, we are continuing to see evidence of shortage of stock both in the new build and second hand market. And despite the announcements at the recent Conservative Party conference, it is hard to envisage this changing any time soon. Against such a backdrop, prices in general are likely to remain elevated and indeed, as the survey indicates, continues to rise over the medium term in most parts of the country.”
Looking at the lettings market, interest from prospective tenants declined during September with only 13% of respondents in the region noting a rise, rather than a fall, in demand (down from 29% in August). Landlord instructions declined alongside this, meaning rent expectations are somewhat subdued in the near term, with 21% of respondents anticipating a rise in rents (down from 32% in August).