Increased optimism from buyers and sellers has resulted in a pick-up in sales activity in the Welsh housing market, according to the January 2020 RICS UK Residential Market Survey, with both the number of agreed sales and new homes being listed for sale rising over the month.
The number of homes coming to the market in Wales increased only modestly in January, as a net balance +7% of respondents reported a rise. Notably though, this was the second month in a row that the balance of respondents in Wales said that the number of instructions to sell increased, after a sustained period of falls.
In addition to the modest increase in homes being put up for sale, January saw an increase in the number of people looking to buy, with a net balance of +31% of respondents saying that new buyer enquiries increased. As well as this, newly agreed sales rose, according to a net balance of +32% of Welsh respondents.
Despite the improvement in instructions to sell though, this follows a sustained period of falling supply, meaning average stock levels remain low. And indeed, anecdotally, Welsh surveyors continue to report low levels of stock as a challenge for the market.
Looking ahead, respondents to the survey expect the renewed optimism in the market to continue, with sales anticipated to rise both in the near term and for the year to come, despite the supply-side challenges.
RICS Residential Spokesperson for Wales, and Director of Kelvin Francis, Cardiff, Tony Filice FRICS, said: “January saw a marked increase in activity in terms of viewings and offers being received. Vendors now feel more ‘upbeat’ about listing their houses. Signs are positive for both buyers and sellers. Next quarter should see a rejuvenation of the market.”
The main findings of the latest survey for Wales were as follows (all figures indicate the net balance of respondents):
- The headline price balance was +26% in the latest survey, indicating that house prices rose.
- The price expectations balance for the next three months was +38% suggesting that prices are expected to rise firmly.
- The sales expectations balance was in positive territory, at +32% pointing to an expectation that sales activity will improve.
- The new buyer enquiries net balance was +31%, pointing to a firm rise in January
- The balance for newly agreed sales +32%, indicating a firm increase in newly agreed sales
- The number of new properties coming onto the market rose very modestly according to the net balance for new instructions (+7%)
- A net balance of +93% of survey respondents expects house prices in Wales to rise over the next 12 months.
- A net balance of +67% of survey respondents expects sales activity in Wales to rise over the next 12 months.
Simon Rubinsohn, RICS Chief Economist, said: “The latest survey results point to a continued improvement in market sentiment over the month, building on a noticeable pick-up in the immediate aftermath of the General Election. The rise in new sales instructions coming onto the market is a much-needed development, given the lack of fresh listings over the past few years had pushed stock levels to record lows. It remains to be seen how long this newfound market momentum is sustained for, and political uncertainty may resurface towards the end of the year. But, at this point in time, contributors are optimistic regarding the outlook for activity over the next twelve months.”
In the lettings market, the latest results show tenant demand fell modestly in January (non-seasonally adjusted figures). Landlord instructions were also lower, according to the net balance of respondents. +11 percent of respondents expect to see rents rise higher over the next three months.
