Housing market activity continued to drop in May

Most estate agents continued to see falling buyer enquiries, sales and house prices in May, despite the government reopening the housing market on May 12.

The latest monthly housing market survey by the RICS found that sentiment among estate agents had improved from the record lows seen in April, but that the majority were nevertheless continuing to see housing market activity drop away.

The market survey measured a score of -5% on new buyer enquiries, up from -94% in April but still indicating that more surveyors saw a fall in enquiries than a rise. Likewise, newly agreed sales registered a balance of -35%, up from -93%, and new instructions scored -20%, up from -97%.

The survey showed that the impact of the covid crisis on house prices is starting to be felt more widely, with the national net balance falling to -32%, from -22% in April, albeit expectations of future falls in prices moderated slightly.

These findings appear to contradict reports from online property listings websites, which have reported very high demand for homes since the market reopened in May. Zoopla said yesterday that newly agreed sales had returned to pre-covid levels, rebounding 137% since the market reopened.

For the first time this month, the RICS asked surveyors whether they expected buyers’ priorities to change after the covid crisis. The survey found four out of five said they expected higher demand for homes with gardens or balconies, and two thirds saying similar about properties with greater private and less communal space. Similarly 78% said the appeal of tower blocks will fall.

These findings echo Zoopla’s data, which found the recovery in demand for homes in London lagging behind the rest of the country, as more buyers look outside the capital.

Simon Rubinsohn, RICS’ chief economist said it was encouraging that pre-covid sales that were in the pipeline were now “largely going through.” He said: “It remains to be seen how sustained this improvement will prove. Much will inevitably depend on the macro environment and, in particular, the resilience of the jobs market as the furlough scheme unwinds.”

“There are already signs that those looking to buy a house are responding to the conditions created by the pandemic by seeking out properties with gardens or balconies and nearer green space. These and other similar features are likely to increasingly command a premium over higher density urban locations.”