Despite supply falling to historically low levels at the end of 2019, with fewer than 43 properties per estate agency branch, the RICS UK Residential Survey for January suggests that new instructions are increasing.
In December, the net balance for new enquires stood at +11% following six months of significant decline and contraction as sellers steered clear of a politically volatile property sector.
This figure has jumped to +19% in January, suggesting confidence is returning to the market and sellers and housing stock is finally returning.
Buyer enquiries are rising in line with fresh housing stock as the net balance for new buyers increased from +19% in December to +23% at the start of the new decade.
Following a four month period of decline, agreed sales rose for the second consecutive month, spiking at +21% of respondents.
Given the stronger market activity, the report has highlighted a distinct uplift in house price growth with December’s -2% rising significantly to +17% in January.
63% of survey respondents noted that homes priced below £500,000 are coming in at least level with housing prices.
However, the conditions for more premium property is less optimistic in the current market with 56% reporting that sales prices are coming in below the asking price. Whilst this has fallen from 67% in December, buyers in this sector of the market remain less confident.
In part, this uncertainty is driven by the possibility of stamp duty land tax changes in the March election. Anecdotally, many firms’ buyers are prepared to delay their property purchase until after the budget announcement or offer a lesser price to reflect the stamp duty they are liable for in the present.
Alexander Smith, Capricorn Private Clients senior advisor, said:
“We are seeing this attitude across the board.
“They are looking at the budget to see if there is going to be any more flex on stamp duty. At the same time, we are seeing international buyers keen to get purchases done, in case the government introduces any new taxes that will penalise them.”
With conditions improving and available housing stock returning and increasing, is the government likely to reform stamp duty in the upcoming budget?