Surveyors predict sales slowdown by February

Most estate agents now expect the volume of house sales to fall over the next three months, despite continued strong demand for homes, according to the latest figures from the RICS.

The RICS’ monthly housing market survey found that a small majority of surveyors now expect sales volumes to fall over the next three months, as the end of the temporary stamp duty holiday draws near. A balance of -4% of respondents said they expected sales to increase, denoting a small fall.

Despite this prediction, a small majority of estate agents said they still expected prices to rise, with 13% more saying they expected a rise than a fall in prices in the next three months.

The figures come after the Halifax this week reported that house prices have risen over the last year by 7.6%, with the majority of that growth coming since lockdown was eased in May.

The RICS’ survey found widespread growth in buyers enquiries and new instructions with the majority of estate agents reporting growth in both metrics in the last month. However, in a further sign of steam slowing coming out of the market, the balance of +27% reporting growth in buyer enquiries was the fourth month in a row this figure has fallen, from a high of +75% in July.

Likewise, the +16% figure for those reporting growth in listings – though still a majority – was the lowest growth for six months.

Survey respondent Christopher Jowett, of Jowett Chartered Surveyors and Estate Agents, Huddersfield told the RICS that he now expected a big crash in the market after the stamp duty holiday is phased out, with the current “false” market a “crazy unreal bubble”. He said: “The stamp duty incentives were unnecessary and it was pouring petrol on the burning fire. [In] 2021 10% drop or 20% when the recession kicks in and unemployment rises.”

A large number of respondents also reported concerns about delays in conveyancing and sale process given buyers need to complete sales prior to the March 31 stamp duty cut-off.

Simon Rubinsohn, the RICS’ chief economist, said the survey showed there was “considerable concern” about the prospect of a sharp slowdown in transaction activity following the end of the first quarter of the coming year.

He said: “A scaling back in direct government support for the market is part of the reason for this but it is being compounded by expectations of material rise in unemployment as redundancy programmes begin to take effect. Meanwhile, there is little sense that the projected softer sales picture will feed through into pricing which is viewed as likely to prove rather stickier in the face of ongoing macro challenges.