Sales expectations improve among surveyors as Bank of England holds base rate again

Buyer demand and sales expectations showed an improved picture in November according to the Royal Institution of Chartered Surveyors (RICS)

RICS’ latest UK residential survey shows a net score of -14% for new buyer enquiries in November. This is the least negative figure since April 2022, although still signals falling demand. For agreed sales, the latest net balance is -11%, compared with -23% in October, which RICS said “suggests the downward trend in sales volumes is easing.”

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Near-term sales expectations over the next three months showed the first positive reading since early 2022 at +6%, while the balance for expectations over the next 12 months is now +24%, the highest figure recorded since January 2022.

RICS said the improvement in the sentiment was supported by an “small easing” in mortgage rates over recent weeks amid confidence the interest rate cycle has “peaked”.

The Bank of England yesterday decided to hold the base rate at 5.25% for the third successive months, after increasing it 14 consecutive times before that.

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The survey results also suggest house prices are now falling at a slower rate with a net balance of -43% of surveyors reporting price falls in November compared to -61% in October.

Simon Rubinsohn, chief economist at RICS, said: “The latest RICS Residential Market Survey provides further evidence that sentiment is a little less negative than previously was the case with, critically, the new buyers enquiries indicator finally beginning to stabilise.

“This is being aided by increased confidence that the interest rate cycle has peaked which is reflected in somewhat more competitive mortgage products coming to the market.

“However, with the cost of money likely to remain elevated for some time to come and the economic outlook still downbeat, it is not surprising that the overall tone to the anecdotal remarks from survey respondents is still quite cautious.”

RICS UK Residential Market Survey explained 

The RICS UK Residential Market Survey is a monthly sentiment survey of chartered surveyors who operate in the residential sales and lettings markets.

Surveyors are asked 18 questions on a range of metrics such as sales, enquiries, listings and house prices and are asked whether these have increased, stayed the same or decreased. 

The ‘net balance’ refers to the proportion of respondents reporting a rise in a metric minus those reporting a fall.  

For example, if 30% reported an increase in buyer enquiries and 5% reported a fall, the net balance would be +25%.

 

 

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