RICS Residential Market Survey May 2023

Buyer enquiries remain in decline 

• Buyer enquiries picked up on the previous month (-34%) with a net balance of -18% in May, but remain in negative territory. 
• In terms of agreed sales, a net balance reading of -7% was posted in May, up from -18% in April and -29% in March.

Inventory levels improve 

• With respect to new instructions, the latest net balance was +14%, the strongest reading since March 2021, following thirteen consecutive months of negative readings. 
• The average number of properties on estate agents’ books was 38 in May but remains low on a historical comparison and below the average seen over the past five years.

New instructions on the rise

Source: RICS

Note: Net balance = Proportion of respondents reporting a rise minus those reporting a fall (e.g. if 30% reported a rise in prices and 5% reported a fall, the net balance will be 25%).

Prices stabilising 

• The national net balance for house prices increased marginally to -30% in May, up from --39% in April. 
• Price declines in London slowed (net balance of -3%), while net balances declined further in the South East (-48%) and East Midlands (-68%).

Outlook

• Near-term sales expectations improved in May, with a net balance of -7%, the least pessimistic view in twelve months.
• For the year ahead, the net balance for sales expectations was +2%, largely unchanged from +3% in April.
• Price expectations for the next twelve months have stabilised with a net balance of -3%, up from -16% in April.

Rental market 

• Tenant demand continues to rise, according to a net balance of +44% of contributors. 
• On the supply front, a net share of -23% of respondents noted a decline in new landlord instructions.
• As a result, a net balance of +53% of respondents foresee rental prices increasing.

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