Confidence is starting to recover following the immediate reaction to the EU Referendum, as the North East’s residential market experiences a slight upturn in August, according to the latest RICS (Royal Institution of Chartered Surveyors) UK Residential Market Survey.
During August, 50% more agents in the North East reported an increase in buyer enquiries (up from 26% in July), whilst 19% also reported an increase in prices (up from 16% in July), with 15% of respondents expecting prices to rise further – albeit modestly – over the coming three months.
This slightly stronger picture is also reflected in price expectations for the coming year, with modest increases anticipated in most parts of the country including the North East.
A key factor in supporting the rising prices is the continued shortage of stock for sale in the North East. This looks set to continue as new instructions (homes coming on to the market) declined once more during August. As a result, stock on estate agents books slipped, with many reporting record low volumes of stock.
The shortage of housing stock in the region has seen sales decline in months of late, particularly in the aftermath of the referendum. However many North East agents commented that they anticipate the sales market will become more active over the next 12 months as more vendors return, having gained confidence in the market once again.
Paul McSkimmings of Edward Watson Associates – based in Newcastle and Durham – said: “We’ve seen a slight slowdown in instructions, but this is to be expected, given the August summer holidays. But both buyer enquiries and the volume of new stock coming on to the market have picked up in the last 7-10 days, so the months ahead look very positive.”
Simon Rubinsohn, RICS Chief Economist, commented: “There are clear signs that the housing market in the North East is settling down after the initial surprise of the outcome to the EU referendum. Sales expectations are beginning to edge upwards once again, and it’s likely the swift response from the Bank of England, both in terms of the lowering of the capital buffer and the cut in interest rates, has played a role in helping to support confidence.
“The more assured mood is also reflected in some of the longer term RICS indicators although this in itself could serve to re-ignite ongoing concerns surrounding affordability, with five year projections for both prices and rents in the latest survey back to their highest level since May.”