Would-be sellers have been sitting tight in March, while the number of new buyer enquiries has remained flat, says RICS.
What’s the latest?
Housing market activity stagnated in March as buyers and sellers stayed away from the market.
A further fall in the number of homes being put up for sale pushed stock levels down to a new record low.
At the same time, enquiries from new buyers were flat for the third consecutive month, according to the Royal Institution for Chartered Surveyors (RICS).
Unsurprisingly, the lack of activity meant sales levels failed to pick up, although the shortage of stock continued to underpin house prices in all regions except London.
Why is this happening?
The property market continues to be hamstrung by the limited number of homes being put up for sale.
The lack of properties on the market is deterring existing homeowners from trading up the ladder, which means they are not freeing up homes for first-time buyers to purchase.
The situation is likely being exacerbated by the uncertainty due to Brexit, which may be causing people to put off major financial decisions, like moving home, until the outlook is clearer.
The current stalemate is likely to continue until more homes are put on the market.
Who does it affect?
While the national picture is one of a stagnating housing market, the headline figures mask considerable regional variations.
House price growth accelerated in all regions of the UK apart from London, with particularly strong growth recorded in the north west.
But in the capital nearly half of estate agents said they had seen price falls, the weakest figure since 2009.
Sounds interesting. What’s the background?
Going forward estate agents remain subdued about the property market’s prospects, with the number of people who expect sales levels to pick up falling compared with February.
Simon Rubinsohn, RICS chief economist, said: “The latest results for the RICS survey show little change in the underlying picture surrounding both sales and markets.
“High end sale properties in Central London remain under pressure, while the wider residential market continues to be underpinned by a lack of stock.”
Meanwhile, in the letting market demand from potential tenants continued to rise, while new landlord instructions fell for the sixth month in a row.
The mismatch between supply and demand is continuing to push rents higher.
The cost of letting a home is expected to increase in the coming 12 months in all areas of the country apart from London, where rents are predicted to decline in the near-term.
Top 3 takeaways
- Housing market activity stagnated in March
- The number of homes for sale fell to a new record low
- Enquiries from new buyers were flat for the third consecutive month