Near-term house sales expectations ‘at most positive level since January 2020’

Expectations for a house sales uptick over the next few months have reached their strongest levels since the start of 2020, according to surveyors.

A net balance of 30% of property professionals expect sales to rise over the next three months rather than fall, the Royal Institution of Chartered Surveyors (Rics) said.

This was the most positive sentiment seen since January 2020.

Looking to the year ahead, a net balance of 45% of professionals expect sales to increase rather than decrease.

Rics’ report for the month of July also found that a net balance of 19% of professionals reported house prices falling rather than rising, with particularly weak price readings in East Anglia and Yorkshire and the Humber.

Scotland and Northern Ireland bucked the trend, with surveyors there reporting prices rising overall.

Looking ahead, a net balance of 46% of professionals expect prices to be higher in a year’s time.

The Bank of England base rate was cut from 5.25% to 5% last week, boosting expectations of a pick up in the housing market this autumn.

Rics said that in the rental market, the gap between demand and supply continued to widen in July. Demand continued to rise modestly, while landlord instructions fell.

While the growth rate of the gap slowed, the trend points towards rental prices continuing to increase, the report said.

Rics chief economist, Simon Rubinsohn, said: “The new Government’s focus on boosting housing development alongside the recent quarter point base rate cut does appear to have shifted the mood music in the sales market, with projections for both near and medium activity picking up according to the latest Rics residential market survey.

“Inevitably, significant challenges lie ahead in delivering on the ambitions around planning reform and it is far from clear that the Bank of England will follow the August move with further easing over the coming months, but, even so, the policy mix is becoming more supportive for the sector.

“However, if there is a bit more hope regarding the sales market, the difficulties in the lettings market remain as intense as ever with little prospect of any relief in sight. Demand is continuing to run ahead of supply with many respondents to the Rics survey noting that landlords are looking to reduce holdings in the face of an increasingly hostile environment for investment in the sector.”

Sarah Coles, head of personal finance at Hargreaves Lansdown said: “The overall picture for July is fairly stilted, with the number of buyers, sellers and sales remaining relatively flat, and prices continuing to fall.

“However, there’s a growing confidence among agents that the rate cut could mark a turning point for the market, boosting sentiment, and encouraging a boom. It remains to be seen whether buyers will share their view.”