House sales are expected to be lower in a year’s time as the tough economy weighs down on the market, surveyors have reported.
Current market activity is strong, with a net balance of 52% of property professionals reporting an increase rather than a decrease in new buyer inquiries in September, the Royal Institution of Chartered Surveyors (Rics) said.
It said house prices are generally increasing across the UK, but more modestly in London compared with other regions.
The supply of fresh homes coming to market has been increasing for four months in a row – the longest stretch of growing supply since 2013.
But stock levels remain relatively low, averaging 42 properties per estate agent branch, the report said.
A balance of 55% of professionals saw the number of agreed sales increase rather than decrease in September.
Rics said this is mirrored in each part of the UK, led by exceptionally strong growth in East Anglia, the South West, and Yorkshire and the Humber.
A balance of 17% of surveyors expect sales to increase rather than decrease in the next three months – but looking further ahead, the majority expect sales to fall.
A balance of 34% of property professionals said in September that they expect sales to be lower in 12 months’ time, moving deeper into negative territory than 17% who felt this way in August.
Contributors cite potential job losses across the economy once the furlough scheme is withdrawn as a significant risk for market activity further ahead, Rics said.
Looking ahead, a net balance of 23% of professionals see prices continuing to rise over the next three months.
Price expectations for a year’s time also remain modestly positive, but the outlook varies.
Rics said Wales and the North West of England display very strong expectations for prices in the year to come, but projections are broadly flat or slightly negative in the North East, Yorkshire and the Humber, the West Midlands and London.
Simon Rubinsohn, Rics chief economist said: “There is increasing concern that the combination of significant job losses over the coming months allied to the scaling back of policy initiatives in early 2021 will have an adverse impact on transaction levels.
“Meanwhile there is little sense this softer sales picture will be accompanied by very much easing in the momentum around prices and rents, adding to the ongoing challenge around affordability.”
The findings were released after Halifax reported on Wednesday that house prices jumped by 7.3% in September – the strongest annual increase since June 2016.
It took the average UK house price to just below the quarter of a million pounds mark, at £249,870, Halifax said.