RICS: “Sales expectations rise with General Election out the way”

Expectations about sales volumes among surveyors and estate agents is at its most upbeat level for more than two years and may improve with the election out the way, RICS suggests.

It comes as the June RICS Residential Market Survey highlighted subdued activity in the run up to the General Election but increased optimism for the months ahead.

The flow of new instructions coming onto the sales market slowed last month, with a net balance reading of -9 and the level of market appraisals was flat.

The new buyer enquiries measure also posted a net balance reading of -7% during June, marking the third successive month where enquiries have reportedly slowed.

Meanwhile, the newly agreed sales gauge posted a net balance of -7% in June, marginally less negative than the reading of -13% seen previously.

These two downbeat readings followed a brief period of recovery earlier in the year, RICS said.

However, a net balance of +20% of respondents now predict residential sales volumes will recover over the next three months. This is an improvement on a reading of +10% last month and is the most upbeat figure for the near-term sales expectations indicator since January 2022.

On house prices, the report shows a net balance of +41% are expecting an increase in the next 12 months but more are expecting a drop over the short term as affordability pressures persist.

Tarrant Parsons, senior economist for RICS, said there are some factors emerging now that could support a recovery in the months ahead.

Parsons said:

“If the Bank of England does decide that the current inflation backdrop is benign enough to start loosening monetary policy next month, this may prompt a further softening in lending rates.

“In addition, the recent election delivered a clear outcome, with housing pushed up the political agenda.”

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