The outlook for the housing market in Wales stays difficult amid a fall in market exercise throughout September, in response to the most recent RICS UK Residential Market Survey.
A web steadiness of -46% of Welsh respondents to the most recent survey reported a fall in new purchaser enquiries in September. That is the sixth month in a row by which purchaser curiosity has dropped.
Because the market loses additional momentum, gross sales have unsurprisingly fallen too, with the September determine that means that the variety of gross sales in Wales has now fallen for six months in succession (a web steadiness of -33%). Wanting forward, gross sales expectations over the subsequent three months additionally stay adverse. A web steadiness of -13% of respondents in Wales anticipate gross sales to fall within the three months forward.
Surveyors in Wales are additionally much less optimistic about home costs than they had been. Whereas home costs have been propped up by an absence of provide most just lately, and the most recent web steadiness of +29% demonstrates that this has nonetheless been the case within the three months to September, the info is notably much less optimistic than beforehand and continues the development since April 2022 of an easing in home value development (it was a web steadiness of +93% 5 months in the past).
The outlook for costs has additionally worsened, with a web steadiness of -15% of Welsh respondents anticipating that costs will fall over the subsequent three months, down from -3% within the August report.
Paul Lucas FRICS of R.Ok.Lucas & Son in Haverfordwest stated:
“Exercise available in the market is slowing down and this was noticeable earlier than the most recent UK mini finances.”
Anthony Filice FRICS of Kelvin Francis Ltd Cardiff stated:
“Viewers are taking extra time earlier than making presents. Some vendor’s expectations are behind market adjustments and they’re nonetheless anticipating fast gross sales and better costs. Enticing properties are nonetheless promoting, however after an extended advertising and marketing interval.”
Commenting on the UK image, Simon Rubinsohn, Chief Economist, commented:
“The turmoil in mortgage markets in latest weeks has compounded the growing degree of financial uncertainty ensuing from larger vitality payments and the broader price of dwelling disaster, in shifting the dial within the housing market. Regardless that the headline value steadiness stays in optimistic territory for now, storm clouds are seen within the deterioration of close to time period expectations for each pricing and gross sales. Wanting additional out, the image portrayed by the RICS survey has clearly shifted in a adverse route.”
“How this performs out by way of arduous information will inevitably rely partly on the state of the mortgage market as soon as it settles down, however it’s tough to not envisage additional strain on the housing sector because the economic system adjusts to larger rates of interest and the tight labour market begins to reverse.
“For now mortgage arrears and possessions stay at historic lows however they’re inevitably going to maneuver upwards over the subsequent 12 months, as strain on householders grows. Nonetheless, as lenders have been much more cautious via this cycle with excessive mortgage to worth mortgage accounting for a a lot smaller share of the lending e-book than prior to now, this could assist to restrict the opposed impression available on the market.”
