The latest market report from the Royal Institute of Chartered Surveyors found market activity still falling, with less buyer enquiries and less newly agreed sales in June than in May, although the pace of decline has slowed. ‘A further reduction in mortgage availability coupled with continued negative news flow discouraged the market,’ says the report.
Sentiment has improved between May and June, with the net balance of surveyors reporting falling rather than rising prices moving to -88.0 from -92.2 in May. There is a very low level of distress sales being recorded, a fact consistent with the low level of mortgage arrears and the high level of employment, while new instructions have begun to pick up in London, according to surveyors there.
‘The net balance of surveyors expecting a drop in sales over the next three months was -7 compared with -15 in May, and confidence in prices also improved, although there is still a widespread perception that prices will fall further in the longer term,’ the report states.
Seema Shah from Capital Economics said this was all evidence that prices, and confidence, have further to fall: ‘The balance of surveyors reporting house price falls, at -88% in June, remained near the record low of -94% reached in April, and far below the trough reached in the 1990s housing market crash (-64%). Surveyors remained downbeat about the outlook for house prices, with the price expectations balance remaining firmly in negative territory at -68%, albeit higher than the -71% recorded in the previous month.
‘Today’s survey echoes the raft of downbeat news on the housing market in recent weeks. There is also growing evidence that the economy is slowing sharply and the labour market is weakening, both of which will weigh heavily on buyer confidence. The housing market correction still has far to go.’