RICS: UK property market is improving but “realistic pricing” is key

RICS has released its Residential Market Survey for August 2024, which shows UK property market is improving but “realistic pricing” is key.

House price expectations over the next 12 months among agents and surveyors have turned positive for the first time since October 2022.

The latest RICS Residential Market Survey for August shows a net balance figure of +1 expect house prices to rise in the next 12 months.

That may seem small but it is up noticeably from a reading of -18% last month and the first time that the data has been positive since the aftermath of the 2022 Truss and Kwarteng mini-Budget that rattled financial markets.

When disaggregated, while most parts of the UK now show either a flat or modestly positive picture for house prices, Northern Ireland and Scotland appear to be the most optimistic.

In the near term, a net balance reading of +14 are predicting a steady rise in house prices over the next three months.

Other market indicators are also turning more positive.

August’s survey results show a rise in the number of people looking to buy homes, with a net balance of +15 of respondents noticing an improvement – the most positive reading for the demand series since October 2021, albeit from a low base.

The newly agreed sales indicator posted a net balance reading of +6%, modestly higher than the figure of -1% seen last time

Looking ahead, the near-term sales expectations measure recorded a net balance of +37% for the next three months, rising to +45% over 12 months.

A net balance of +7% anticipated a rise in fresh listings, while +23% reported that they were conducting more appraisals.

Simon Rubinsohn, chief economist for RICS, said:

“The latest RICS survey captures an improvement in sentiment over the past month in the wake of the modest decline in mortgage rates with buyer interest improving, albeit from a relatively low base, and stock levels edging up.

“However, anecdotal remarks from respondents still demonstrate the need for realistic pricing to get deals done with uncertainty both around the scope for further interest rate cuts and the likely contents of the forthcoming Budget keeping the mood in check.”

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