A slowdown in demand in the housing market in Wales is leading to a cautious outlook amongst surveyors for the final quarter of the year, according to the latest Royal Institution of Chartered Surveyors (RICS).
A net balance of -43% of surveyors in Wales reported that new buyer enquiries fell through September which is the lowest this balance has been since October 2023, and the lowest balance across all the UK regions.
As demand is falling, supply is rising. A net balance of 31% of Welsh respondents reported that new instructions to sell increased in the most recent survey.
However, with limited demand, it is unsurprising that sales were reported to have fallen broadly flat through September. A net balance of -3% of surveyors in Wales noted that sales had fallen, down from +28% in August.
And this may be weighing on surveyors’ outlook for sales over the next quarter. A net balance of -10% of Welsh surveyors anticipate that house sales will fall through Q4.
Regarding pricing, respondents in Wales report that prices fell broadly flat through Q3. On the outlook, a net balance of -30% of Welsh surveyors expect prices to fall over the next three months.
Looking at the lettings market, a net balance of 67% of survey respondents in Wales noted a rise in tenant demand, whilst a net balance of -40% of Welsh surveyors noted a fall in landlord instructions. This has led to a net balance of 67% of surveyors expecting rents to rise through the final quarter of 2024.
Commenting on the sales market, Anthony Filice, FRICS of Kelvin Francis Ltd, in Cardiff said: “Appraisals and instructions are strong and if realistically priced, in the middle to lower price bands, are selling. Above £800,000 and especially over £1,000,000 are slow, we suspect, waiting on the result of the Budget. Some vendors are still asking too much and ending up with even less.”
Tim Goodwin, AssocRICS of Williams & Goodwin The Property People in Gwynedd added: “There has been a noticeable increase in sales falling through in recent weeks not helped by the implementation of Article 4 Planning controls over holiday lets and second homes.”
Discussing the lettings market, Paul Lucas, FRICS of R.K.Lucas & Son in Haverfordwest commented: “Availability of rentals is scarce as landlords and second home owners retreat from the market in the light of new government legislation. Demand is high and according to standard economics principles, rents are increasing – at the present time, mostly due to government intervention.”
Commenting on the UK picture, RICS Head of Market Analytics, Tarrant Parsons, said: “The latest survey results once again convey a brighter picture for housing market activity, with the recent easing in mortgage interest rates continuing to support a recovery in buyer demand.
“Critical for the outlook, a further unwinding in monetary policy is anticipated over the months ahead, which should create a more favourable backdrop for the market moving forward. In keeping with this idea, forward-looking sentiment data from the survey points to sales volumes gaining impetus, both in the near-term and over the next twelve months.”
