House prices in Wales fell flat over the past three months according to the latest Royal Institution of Chartered Surveyors (RICS) Residential Market Survey, however buyer enquiries and sales remain in positive territory and expectations for market activity have improved.
A net balance of 1% of respondents in Wales said that prices increased over the past three months, down from 4% that was seen in October. This is consistent with a broadly flat picture.
Welsh surveyors report though that demand rose through November. A net balance of 25% of respondents note a rise in new buyer enquiries, up from 18% in October.
On the supply side, a net balance of 16% of respondents in Wales reported a rise in new instructions to sell, up from -22% the month previous.
With both demand and supply edging upwards, sales also remained in positive territory, with a net balance of 19% of surveyors in Wales reporting an increase in sales.
As a result, three month expectations for activity have improved marginally, moving out of negative territory for the first time in three months.
Looking at the rental market, a net balance of 67% of Welsh respondents saw a rise in tenant demand, and a net balance of -50% noted a fall in landlord instructions. With these results, its unsurprising that a net balance of 50% of respondents anticipate rents to increase over the next three months.
Commenting on the sales market, Paul Lucas, FRICS of R.K.Lucas & Son in Haverfordwest said: “The market is beginning to settle down after a period of significant upheaval and uncertainty. It is hoped that sales will continue to stabilise.”
Tim Goodwin, AssocRICS of Williams & Goodwin The Property People in Gwynedd added: “The market seems to have accepted limited reductions in interest rates but sales activity is still stable.”
Discussing the lettings market, Anthony Filice, FRICS of Kelvin Francis Ltd in Cardiff commented: “A number of landlords are exiting the market and selling off properties. This is because of increasing tenant biased regulation. The likely shortage of properties will not be to the benefit of tenants however, with reduced choice and upward market pressure on rents.”
Commenting on the UK picture, RICS Senior Economist, Tarrant Parsons, said: “Although the latest survey results continue to signal a steady improvement in buyer demand across the residential market, the broader macro environment is likely to pose additional headwinds moving forward. Most significantly, the recent rise in mortgage interest rates may curtail the recovery in market activity before long, and this is reflected in the slightly less optimistic sales expectations data coming through this month.
“Moreover, measures of consumer and business confidence across the economy have deteriorated of late and, if sustained, this could begin to feed through into housing market conditions in the months ahead.”
