Market remains ‘downbeat’ despite increased optimism about future sales, says RICS

The housing market remains “downbeat” with indicators on demands, sales, new listings and prices all remaining in negative territory, say surveyors.

The latest residential market survey by the Royal Institution of Chartered Surveyors (RICS) shows a score of -29% for surveyors reporting a fall in demand in March, barely changed on the -30% recorded for February. A minus score means there was a higher proportion of surveyors reporting a fall than a rise (see box below).

The survey findings show the net balance for agreed sales has fallen to -31%, down from -25% in February, although still less negative than the -43% reported last October in the wake of Liz Truss’ disastrous mini-budget.

Near-term price expectations remain downbeat with a score of -49% expecting decreases.

Surveyors also reported supply dropped in March, with a score of -6% for new listings of properties, down month-on-month from -4%.

However, the survey also found sales expectations over the next 12 months are now at 1% -the first positive score since March 2022 - while the -24% foreseeing a decline in prices over the next year is the lowest figure since September last year.

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Simon Rubinsohn, chief economist at RICS, said: “The overall tone of the feedback still one of caution towards the sales market, which is reflected in both the headline price and activity indicators.

“Deals are being done, but a theme coming through in the anecdotal remarks is the need for vendors to recognise the shift in market dynamics. Significantly, there is also a sense that the medium-term outlook is looking a little more settled, helped by the perception that the interest rate cycle may be near the peak.”