The outlook for the Welsh housing market has improved following the General Election result, according to the December 2019 RICS Residential Market Survey, with price and sales expectations for the three months ahead increasing sharply.
A net balance of +48 percent of respondents in Wales now expects prices to rise over the next three months and a net balance of +39 percent expects sales activity to increase in the same timeframe. Indeed, the sales expectations balance is now at its highest level since January 2018. Meanwhile the price expectations balance in Wales is the highest in the UK.
This increase in confidence comes as Welsh respondents report a growing number of new buyers active in the market, and a rise in newly agreed sales. A net balance of +47 percent of respondents says that new buyer enquiries increased last month, the strongest this indicator has been since mid-2017.
However, the rising number of potential new buyers does not appear to be accompanied by a similar uplift in the number of properties becoming available for sale. The indicator for new instructions to sell is broadly flat, suggesting that the supply side has not improved, following on from three consecutive months of decline.
This imbalance between supply and demand will likely act as a drag on activity in the month ahead and as well as acting to push up prices.
RICS Residential Spokesperson for Wales, and Director of Kelvin Francis, Cardiff, Tony Filice FRICS, said: “The market seemed to have gone into something of a hibernation in November and early December, with lower levels of sales and instructions, resulting in part from the general election and Brexit uncertainty as well as for the usual seasonal factors. However, potential new buyers appear to be out in force, and our own experience is that many vendors are now considering putting their property on the market in anticipation of good activity in the early months of this year.”
Andrew Morgan, FRICS from Morgan & Davies in Lampeter said: “We have experienced a noticeable upturn in sales in the last few weeks. Our stock levels are though reducing which we anticipate will increase prices in the spring.”
In the lettings market, the latest results show tenant demand was flat in December (non-seasonally adjusted figures). Expectations for rents in the three months are for a modest increase. +17 percent of respondents expect to see rents rise higher over the next three months.
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 +15% in the latest survey, indicating that house prices rose.
- The price expectations balance for the next three months was +48% suggesting that prices are expected to rise firmly.
- The sales expectations balance was in positive territory, at +39% pointing to an expectation that sales activity will improve.
- The new buyer enquiries net balance was +47%, pointing to a firm rise in December
- The balance for newly agreed sales +10%, indicating a modest increase in newly agreed sales
- The number of new properties coming onto the market was broadly, according to the net balance for new instructions (+3%)
- A net balance of +88% of survey respondents expects house prices in Wales to rise over the next 12 months.
- A net balance of +83% of survey respondents expects sales activity in Wales to rise over the next 12 months.