Estate agents are expecting to sell more homes and at higher prices after the decisive general election outcome.
A monthly survey of estate agents by the Royal Institution of Chartered Surveyors, undertaken in December, recorded a rise in reported home sales for the first time since May 2019. Respondents also said that they were expecting higher house prices in the near term across all parts of the UK.
Estate agents have been under pressure during a slowdown in the housing market that has been blamed on Brexit uncertainty and changes to stamp duty. However, there have been early indications that consumer sentiment has improved since the election last month. London and East Anglia were among the regions where sentiment improved the most, while sales in Northern Ireland and Scotland weakened, according to the instituion’s survey.
Buyer demand, measured by the volume of new enquiries, increased in most areas last month, with estate agents in Wales and the North East reporting particularly solid growth.
Near-term sales expectations rose for a third consecutive month as new instructions for home sales improved marginally, with London and the South East outperforming the rest of the country. House prices were found to have softened modestly in the South East, London and East Anglia. Respondents in Northern Ireland and Scotland said that house prices were continuing to rise at a firm pace.
The survey polled more than 700 estate agency branches around the country. It is used by the government and the Bank of England as an indicator of housing market conditions.
James Brown, of Norman F Brown, an estate agent in Richmond, North Yorkshire, said: “With the election over, there is a sense that a pressure valve has been released and that the new year market could be quite active in terms of vendor instructions.”
Christopher Bailey, of Knight Frank in Exeter, said: “We are experiencing a better than usual winter market, as expected with the general election result. Nothing dramatic, but all our indicators and measurables are up compared to this time last year.”
Official data yesterday showed an improvement in house price growth. Prices rose by 2.2 per cent in the year to November, the fastest pace in a year, according to the Office for National Statistics and Land Registry.
Simon Rubinsohn, chief economist at the institution, said: “The signals from the latest RICS survey provide further evidence that the housing market is seeing some benefit from the greater clarity provided by the decisive election outcome. Whether the improvement in sentiment can be sustained remains to be seen, given that there is so much work to be done over the course of this year in determining the nature of the eventual Brexit deal.
“The lack of stock on the market remains a potential drag on a meaningful uplift in activity, although the very modest increase in new instructions in December is an early hopeful sign.
“Given that affordability remains a key issue in many parts of the country, the shift in the mood music on prices is a concern, with even London expectations pointing to a reversal of course, both over the coming months and looking further out.”