House prices in Wales continued to edge lower during January, but with demand rising, surveyors expect prices to increase over the next three months, according to the latest Royal Institution of Chartered Surveyors (RICS) Residential Market Survey.
A net balance of -22% of respondents noted that prices fell through the month of January. However, the outlook is more positive, with a net balance of 16% of respondents expecting house prices in Wales to rise over the next three months. This is the first time a rise has been anticipated since August 2022, and the highest that this balance has been since April of the same year.
The improved expectations has come off the back of an increase in demand from new home buyers in Wales. A net balance of 30% of surveyors in Wales noted a rise in new buyer enquiries in January. This is the highest this balance has been since September 2021.
Supply also rose for the second consecutive month with a net balance of 15% of Welsh respondents noting a rise in properties coming onto the market.
With both demand and supply increasing, it is unsurprising that survey respondents in Wales noted a rise in newly agreed sales. A net balance of 55% of surveyors reported a rise in sales through the month, which is the highest that this balance has been in nearly three years.
This may be instilling confidence in Welsh surveyors’ outlook, as a net balance of 40% of respondents anticipate that sales will rise over the next three months. And on the longer term, a net balance of 63% of respondents in Wales expected that sales will rise over the next year.
On the lettings market front, the imbalance between demand and supply continued through January. A net balance of 60% of respondents in Wales noted that demand had risen, whilst a net balance of -25% of Welsh surveyors noted a fall in landlord instructions. As expected with this trend, surveyors in Wales anticipate that this will cause rents to rise, with a net balance of 50% of respondents anticipating an increase in rental prices over the next three months.
Commenting on the sales market, Anthony Filice, FRICS, Kelvin Francis Ltd, in Cardiff said: “There is an increased numbers of applicants registering their interest, and more are serious and readily offering. Properties listed in January, at the right price, are attracting multiple offers, leading to some full price sales. New instructions have also increased.”
Sam Burston, MRICS of David James in Monmouth added: “2024 has got off to a better start than expected, with more people deciding to sell and get on with it now, rather than waiting for spring, particularly with the town market. The rural property market is slower with vendors holding off. Low maintenance and energy efficient houses are in vogue.”
Discussing the lettings market, Paul Lucas, FRICS of R.K.Lucas & Son in Haverfordwest commented: “The letting market remains volatile with many landlords seriously considering exiting the market owing to the recent government regulation and taxation changes.”
Commenting on the UK picture, RICS Senior Economist, Tarrant Parsons, said: “The UK housing market has seen a continued improvement in buyer activity through the early part of the year, supported by the recent easing in mortgage interest rates. Although sales volumes through much of the year ahead are likely to remain relatively subdued compared to the longer-term average, the outlook has now turned modestly brighter on a consistent basis over the past few survey reports.
“However, this is not to say that mortgage affordability isn’t still a significant challenge, and any further unwelcome surprises with regards to inflation may still cause interest rate expectations to be revised. That would then pose a significant risk to any prospective recovery in the months ahead, even if the current prognosis is for the market to see a further pick-up in activity levels.”
