Housing market fell back again in September, says RICS

Sales and demand from new buyers both fell again in September, and the region's chartered surveyors say sentiment in the market is now flatter than at any point since last summer's Brexit referendum.

Looking ahead, property experts believe the near term outlook is subdued for both prices and house sales.

The gloomier picture is painted in the latest residential market survey from the RICS – Royal Institute of Charterered Surveyors – which is seen as a housing industry bellweather.

The organisation said the the West Midlands’ housing market continued to "lack momentum" in September, as demand fell again and rising expectations of a hike in interest rates contributed to the "buyer caution in a slowing market".

In September, 33 per cent more surveyors taking part in the survey noted a fall rather than rise in demand from would-be buyers, following August’s slight pick up in new interest.

Alongside this, 19 per cent more respondents reported a fall in agreed sales rather than a rise – the poorest monthly reading since July last year.

London and South were at the forefront of declines but weakness in the market was widespread in September while only Wales and the South West seeing an increase.

And surveyors are more cautious looking at the next three months, with more expecting a drop in sales.

As sales and new buyers decline, new instructions from home sellers across the West Midlands also fell, having declined continuously for almost the last two years.

As a result, the number of homes on estate agents' books remains at near record lows.

And that shortage of stock has kicked up house prices in the West Midlands

Simon Rubinsohn, chief economist at the RICS, said: “We are continuing to see evidence of shortage of stock both in the new build and second hand market. And despite the announcements at the recent Conservative Party conference, it is hard to envisage this changing any time soon. Against such a backdrop, prices in general are likely to remain elevated and indeed, as the survey indicates, continues to rise over the medium term in most parts of the country."

He added: “It was always questionable to talk about the housing market as a single entity but the stark divergence in key readings from the latest RICS survey demonstrates in the clearest possible terms just how important the regional narrative is at the present time. In part, this is a reflection of affordability constraints hitting the higher priced segments of the market. It is perhaps also indicative of a shift in economic momentum in the face of the increasing possibility of the first hike in base rates in over 10 years.