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New Government Brings Renewed Optimism to the Property Market

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    An Uptick in Market Conditions is Expected in the Coming Months

    The latest RICS Residential Market Survey has revealed an optimistic attitude among UK property professionals. Although the market remains subdued, conditions are expected to increase in the coming months.

    The monthly survey from the Royal Institute of Chartered Surveyors gives a picture of the current sentiment among chartered surveyors in the UK residential sales and lettings sectors. This can provide an idea of the outlook for various market activity indicators in the short and long term. The survey includes data concerning both sales and lettings, making it a valuable resource when investing in buy-to-let.

    The latest report published in July looks at the figures for June 2024.

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      June Shows Most Positive Outlook on Sales Volumes Since January 2022

      Indicators of buyer demand, sales, and prices are still in slightly negative territory, as momentum has been comparatively subdued compared to earlier in the year.

      New buyer enquiries had a net balance reading of -7% in June, only slightly unchanged from last month’s figure of -8%. This is the third consecutive month that enquiries have slowed, suggesting a decline in demand from homebuyers. Newly agreed sales had a net balance reading of -7% this month, an improvement from last month’s -13%.

      The number of new instructions on the sales market also slowed down in June, with a reading of -9% registered. In the six previous reports, positive monthly balances were recorded, so this latest data ends this run of increasing new listings.

      However, sentiment is up as respondents have turned more optimistic about the near-term outlook on sales activity. Respondents anticipating recovered sales volumes in the next three months are up +20%, which is the most promising figure since January 2022.

      The outlook for house prices in the next three months shows a net balance of +5%, suggesting that respondents believe the price decline has run its course. When it comes to the year-long expectation, sentiment is much more optimistic. A net balance of +41% of those surveyed anticipate an increase in house prices over the next twelve months.

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      Rental Prices Expected to Continue Rising

      Looking at the rental market section of the RICS report, a net balance of +28% of survey participants observed an increase in tenant demand during June (not seasonally adjusted). However, new landlord instructions declined, falling from -3% last month to -11%, suggesting the supply-demand imbalance is set to continue for the time being.

      Looking to the future, a net balance of +38% of participants expect rental prices to increase over the next three months. This figure has stayed in the range of +38% and +34% over the past six months, showing consistent expectations of rising prices since January.

      Rising rental income has made rental properties some of the best property investments in the current market.

      Sarah Coles, head of personal finance at Hargreaves Lansdown, commented: “A new government has breathed a new air of optimism into the property market. Agents are hoping this means sales will pick up, and falling house prices will reverse in the year to come.”

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      Author

      Jessica Ferris

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      Jessica Ferris is a property writer at RWinvest, helping our readers stay ahead of property market trends with the latest news and statistics.

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