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RICS Residential Market Survey November 2022

Buyer enquiries remain low

  • The RICS UK Residential Survey for November results point to a further deterioration in market conditions, as buyer demand and agreed sales continue to fall. 
  • The net balance for new buyer enquiries increased to -38%, up from -53% in October, but still below September’s figure of -36%. 
  • Buyer enquiries have remained negative for the seventh successive month. 
  • In terms of agreed sales, a net balance reading of -35% was posted in November, once again an improvement on last month’s figure of -45%, but down from an already low reading of -29% in September.

Inventory levels edge up slightly

  • With respect to new instructions, the latest net balance of -9% points to a slight improvement but remains firmly in negative territory.
  • A net balance of -54% respondents noted that the number of market appraisals undertaken over the month was below the comparable period last year.

Buyer enquiries remain in negative territory

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%).

Price growth slows

  • The latest house price data show a clear slowing in momentum as the national net balance for house prices fell to -25% in November, down sharply from -2% in October.
  • This is the weakest reading since May 2022, indicating that house price growth is stagnating.
  • Some areas of the UK, such as the South West and the South East are experiencing significant pull-back in prices. On the other hand, Northern Ireland and Scotland continue to report an upward trend in house price growth, albeit softer than a year ago.

Outlook 

  • Near-term sales expectations slipped deeper into negative territory, at -44% in November, down from -40% in October. 
  • Over the next twelve months, a national net balance of -38% of respondents foresee sales slipping, broadly in line with October’s reading of -42%. 
  • Price expectations for the next twelve months have dropped substantially to -61% after a net balance of -48% in October 
  • Respondents across virtually all parts of the UK envisage that prices will see some degree of decline over the next year.

Rental market 

  • Tenant demand continues to rise according to a net balance of +35% of contributors, although this is down slightly from +46% last month.
  •  On the supply front, a net share of -27% of respondents noted a decline in new landlord instructions, a sharp drop from last month’s reading of -14%, indicating a fall in supply.
  • As a result, near-term expectations point to further strong growth in rental prices over the coming three months. 
  • However, the latest reading is slightly more modest in comparison to that seen a couple of months prior (net balance +43% vs +66% in February 2022).

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