June 2020

The Royal Institute of Chartered Surveyors has released its first Sentiment Survey since the Government eased restrictions on housing transactions in mid-May.

The Residential Market survey from RICS gauges the mood of member agents across the country. 

Understandably, just a few weeks into the easing of lockdown restrictions in England, the overall sentiment of agents remains cautious, but has improved when compared to the last few months. The sales market as measured by new instructions, new buyer enquiries and newly agreed sales, shows improved sentiment in May following a large decline in lockdown. Overall, indicators on prices and sales remain negative, but enquiries have stabilised.

The survey presents data as a ‘Net balance’. For example, with regards to price, the net balance is the difference between the proportion of respondents who report a rise in prices minus those reporting a fall (if 30% reported a rise and 5% reported a fall, the net balance will be 25%).

Key findings of the survey are that:

• Nationally, buyer enquiries moved from -94% in April to -5% in May.

• Buyer enquiries turned positive for the South East region in May.

• New sales moved from -93% in April to -35% in May.

• New instructions moved from -97% in April to -20% in May.

• Near term sales expectations moved from -58% in April to -4% in May on a national basis, but turned positive in the month for the South East region.

• Nationally, agents expect sales to pick up over the next twelve-months.

• Near term price expectations remain downbeat.

• Tenant demand moved to -12% of respondents, up from -48% in April.

• Landlord instructions continued to fall sharply

As we have reported in recent blogs, it is anticipated that the coronavirus pandemic could result in longer term and more structural changes to what buyers are looking for. The RICS survey confirmed this perspective as;

• 81% of respondents feel there will be an increase in desire for properties with gardens or balconies.

• 74% feel there will be a shift in demand towards homes located near green spaces.

• 68% are of the opinion that properties with greater private and less communal space will become more desirable.

• 78% of respondents sense there will be a fall in the appeal of tower blocks.

• 58% feel properties located in highly urban areas will be less enticing in the future.