Confidence in the UK’s housing market is “beginning to ebb” despite an improved outlook over the past few months, research from the Royal Institution of Chartered Surveyors has found.
The research, ‘UK Residential Market Survey May 2024’, found new buyer enquiries had a reading of -8 per cent, down on the previous month’s survey which reported a figure of -1 per cent.
Rics stated this was consistent with a modest drop-off in demand over the month.
Furthermore, the latest returns marked the softest reading for this metric since November of last year.
At the same time, respondents also reported a fall in the number of sales agreed during May, evidenced by a net balance of -13 per cent, down from the 4 per cent that was recorded in April.
RICS chief executive, Justin Young, said: "Despite an improving overall outlook, today’s data reveals that confidence in the housing market is beginning to dip – just as parties launch their manifestos.
“While both the Conservatives and Labour have staked their claims as being the party of home ownership, for that to be the case, greater attention must be paid to improving conditions for Generation Rent.
“This particular demographic – typically made up of people aged between 18 and 40 – has doubled in the last two decades, so politicians need to focus on them, as well as homeowners, as a means of gaining the support of a growing portion of the electorate.”
Young added the housing market needs policies that “think longer term” as well as an awareness that the different tenures are interlinked, so there is no one solution that will fix the situation.
“With the market under strain, the supply and demand gap in both lettings and buy side continues to create issues,” he added.
“With higher interest rates continuing to hamper first-time buyers, politicians are looking to win support from this group of buyers –as the Conservatives have done with Help to Buy 2.0 and Labour with the Freedom to Buy promise.
“Many millions of voters are feeling both cost of living, and market impacts; the political parties see this and are trying to entice the electorate with proposals in their manifestos this week.”
But the survey also found some more positive indicators, reporting that the flow of sales instructions coming onto the market continued to rise over May.
The new listings indicator registered a net balance of 16 per cent in May.
As a result, the volume of fresh instructions coming onto agents' books has now improved for six consecutive months.
Meanwhile, in the lettings market, tenant demand appeared to regain some momentum over the month, with the May net balance climbing to 35 per cent compared to a reading of 10 per cent previously.
Alongside this, landlord instructions were more or less flat at a net balance of -3 per cent, marking the first time since August 2022 in which this measure has moved into neutral territory.
