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RICS: Housing market sees post-election lift

Housing sentiment improved after the general election result in a number of ways, the RICS UK Residential Market Survey found.

In December 17% more RICS members saw a rise rather than a fall in buyer enquiries, with those in Wales and the North East in particular reporting strong activity.

The number of agreed sales edged up by a net 9%, which includes sharp increases in London and the South East (22% and 23%).

Expectations were also positive, with 31% more RICS members expecting transactions to rise in the next three months.

House prices came in at -2%, though a net 61% expect prices to increase in the next 12 months.

Despite the positivity, landlord instructions were in decline.

Rents are expecting to rise as a consequence of the imbalance between supply and demand in the private rental sector.

Simon Rubinsohn, RICS chief economist, said: “The signals from the latest RICS survey provides further evidence that the housing market is seeing some benefit from the greater clarity provided by the decisive election outcome.

“Whether the improvement in sentiment can be sustained remains to be seen given that there is so much work to be done over the course of this year in determining the nature of the eventual Brexit deal.

“However, the sales expectations indicators clearly point to the prospect of more upbeat trend in transactions emerging with potential purchasers being more comfortable in following through on initial enquiries.

“The ongoing lack of stock on the market remains a potential drag on a meaningful uplift in activity although the very modest increase in new instructions in December is an early hopeful sign.

“Given that affordability remains a key issue in many parts of the country, the shift in the mood-music on prices is a concern with even London expectations pointing to a reversal of course both over the coming months and looking further out.

“This highlights the critical importance of the government addressing the challenge around housing supply particularly with the gradual phasing out of the Help to Buy incentive.”

Sam Mitchell, chief executive at online estate agent Housesimple, said: “The positive sentiment expressed by the latest RICS survey reflects the upbeat start to the year we are experiencing as a sector. Confidence is returning to the property market and the ‘Boris bounce’ has certainly been felt.

“With the ongoing imbalance between supply of properties and demand for houses, combined with low interest rates, high employment and good access to finance, there is a solid foundation in place for house prices to continue on in their uphill climb throughout the year ahead.

“We would therefore encourage sellers to take advantage of the healthy market this year. First-time buyers might be less impressed by rising house prices, but we hope for their sake that some real home building promises or initiatives are going to be announced in the upcoming Spring Budget.”