RICS Residential Market Survey May 2024

Key Takeaways

Buyer enquiries and agreed sales

The May 2024 RICS UK Residential Survey indicates a slight setback for the sales market, with most indicators deteriorating. This is linked to the recent reduction in expectations for monetary policy loosening by the Bank of England in the second half of the year.
Despite setbacks, respondents anticipate a modest recovery in residential sales volumes in the coming months.
New buyer enquiries saw a net balance reading of -8%, down from -1% previously, indicating a modest drop-off in demand and the softest reading since November last year. The most significant decline in buyer enquiries was in the South East and South West of England, with net balances of -27% and -23%, respectively.
The number of sales agreed in May fell, with a net balance of -13%, down from +4% last month.

New instructions

The flow of new sales instructions continues to rise, with the new listings indicator showing a net balance of +16% in May, marking six consecutive months of improvement.
Market appraisals also increased, with a net balance of +17% reporting higher appraisal numbers compared to a year ago, the fifth consecutive positive reading.

Price and sales expectations

Near-term expectations suggest sales volumes will pick up modestly over the next three months, with a net balance of +6%.The twelve-month outlook remains positive, with a net balance of +43% anticipating an increase in sales activity, up from +33% in April.
Near-term national price outlook suggests slight downward pressure in the next three months, with a net balance of -12%, but twelve-month expectations remain positive, with a net balance of +41%.

House prices

House prices retreated in May, with a net balance of -17%, the most negative return since January, suggesting a slight fall in house prices.

Rental market

Tenant demand in the lettings market regained momentum in May, with a net balance of +35%, up from +10% previously.
Landlord instructions were nearly flat, with a net balance of -3%, marking the first neutral reading since August 2022.
Near-term rental price expectations point to continued increases, but at a more modest pace than the past eighteen months, with a net balance of +35% compared to the +53% average in 2023.