House prices in Wales fell through the month of July according to the latest Royal Institution of Chartered Surveyors (RICS) Residential Market Survey, but both supply and demand are reported to have increased and respondents therefore expect sales to rise.
A net balance of -20% of surveyors in Wales reported that prices have fallen over the past three months. This balance is largely in line with the UK average which is reported to be -19%. This may be weighing on Welsh surveyors’ outlook for prices as a net balance of -34% of respondents anticipate that prices will fall over the next three months, which is the lowest balance seen since October 2023.
Surveyors in Wales though reported that demand continued to rise through July as a net balance of 28% of respondents noted an increase in new buyer enquiries. This is the third highest balance seen across the rest of UK regions after the North West and Northern Ireland.
Supply was also reported to have taken an upward turn in the most recent survey. A net balance of 28% of Welsh respondents noted that new instructions to sell rose, up from -31% in June.
As expected, with both supply and demand rising, sales also increased through July. A net balance of 13% of Welsh surveyors reported a rise in sales after falling broadly flat in the survey previous. Surveyors remain optimistic on the sales outlook as a net balance of 16% of respondents in Wales anticipate a rise in sales over the next three months.
On the lettings market, a net balance of 33% of Welsh surveyors noted a rise in demand, and a net balance of -33% of respondents reported that supply levels fell. With the imbalance between supply and demand, unsurprisingly, surveyors in Wales anticipate that rents will rise in the next three months with a net balance of 17% expecting an increase, although this is down from 50% that was reported in June.
Commenting on the sales market, Anthony Filice, FRICS of Kelvin Francis Ltd. in Cardiff said: “Even in holiday season, we have seen a steady flow of viewings, offers and sales. Some vendors are waiting for September, meaning continued instructions. Some vendors are not accepting a re-alignment of values are regretting refusing earlier good offers. Buyers are more confident that mortgage rates will ease.”
Paul Lucas, FRICS of R.K.Lucas & Son in Haverfordwest added: “The market remains sluggish mainly as a result of so many economic uncertainties at present.”
Discussing the lettings market, Tim Goodwin, AssocRICS of Williams & Goodwin The Property People in Gwynedd commented: “We are still experiencing landlords reducing their portfolios, and demand at increasingly high levels resulting in multiple applications for available property and rental levels increasing.”
Commenting on the UK picture, RICS Chief Economist, Simon Rubinsohn, said: “The new government’s focus on boosting housing development alongside the recent quarter point base rate cut does appear to have shifted the mood music in the sales market, with projections for both near and medium activity picking up according to the latest RICS Residential Market Survey. Inevitably, significant challenges lie ahead in delivering on the ambitions around planning reform and it is far from clear that the Bank of England will follow the August move with further easing over the coming months, but, even so, the policy mix is becoming more supportive for the sector.
“However, if there is a bit more hope regarding the sales market, the difficulties in the lettings market remain as intense as ever with little prospect of any relief in sight. Demand is continuing to run ahead of supply with many respondents to the RICS survey noting that landlords are looking to reduce holdings in the face of an increasingly hostile environment for investment in the sector.”
