Property professionals' sales optimism at best level since 2022, survey shows

Expectations for a surge in house sales amongst property professionals are at their strongest since the beginning of 2022, surveyors reveal.

There is an anticipated rebound in home sales over the upcoming three months amongst 20% net balance of professionals, the highest level of sales expectations since January 2022, according to the Royal Institution of Chartered Surveyors (RICS).

But, the June survey indicates that 54% balance of professionals expect house prices to surge within the next year and RICS suggests that this presents a significant obstacle for the incoming Government, as increasing the number of houses on the market "will not be an easy task".

However, homeowners may glean some hope, as Britain's leading banks have begun to slash mortgage rates in recent times. Forecasts from economists suggest a potential cut of the Bank of England's base rate from its highest level in 16 years at 5.25%, down to 5% for the forthcoming vote on August 1.

RICS' senior economist, Tarrant Parsons, comments: "Although activity across the housing market remained subdued last month, forward looking aspects did improve slightly.

"There are some factors emerging now that could support a recovery in the months ahead.

"If the Bank of England does decide that the current inflation backdrop is benign enough to start loosening monetary policy next month, this may prompt a further softening in lending rates.

"In addition, the recent election delivered a clear outcome, with housing pushed up the political agenda."

In the rental market, a net balance of 28% of professionals reported an increase in tenant demand in June.

Conversely, a net balance of 11% noted a decrease in new landlord instructions, indicating a fresh decline in new rental listings.

Looking ahead, a net balance of 38% of professionals predict that rental prices will rise over the next three months.

Sarah Coles, head of personal finance at Hargreaves Lansdown, commented: "Before the election, June brought more of the bad news the market has been used to seeing with falling sales and prices, and dwindling buyer numbers."

"Things were so miserable that even the number of new sellers fell back. It wasn't helped by stubbornly high mortgage rates, with Moneyfacts figures showing the average two-year fixed rate remained just shy of 6% for most of the month.

"July may hold more hope, in part because of the election result, and the arrival of a new government."

She added: "Agents are holding out hope for an upswing in consumer sentiment, buoyed by the optimism that a change at the top can engender, and hope that life in general will change for the better.

"We will have to see whether this materialises, and encourages more enthusiastic buyers into the market in the weeks to come."

This report was published as Barclays revealed data from its current accounts showing that spending on rent and mortgages increased by 1.5% annually in June, slowing from May's uplift of 6.3%. This was the lowest rate of growth since March 2023.

The onset of chilly and lacklustre weather in early June led to a postponement in home and garden makeovers. Home improvement and DIY spending dropped by 9.4% year-on-year, while expenditure at garden centres decreased by 12.7%.

This information is based on data from transactions identified by Barclays as direct debits and bank transfers to various mortgage lenders and private landlords.

A survey conducted by Opinium Research for Barclays in June, which included 2,000 UK participants, revealed that 73% are optimistic about their financial management capabilities.

Mark Arnold, Barclays' head of savings and mortgages, commented: "Our latest spending figures paint an encouraging picture for UK consumers rent and mortgage payments are stabilising, energy bills are coming down, and confidence is on the up.

"However, we're yet to see this translate into spending on sprucing up homes and gardens, with most household categories still in decline. Now that summer has arrived, retailers will be hoping that the warmer weather can unlock that pent-up demand."

TV property guru Phil Spencer advised: "With fierce competition for accommodation, renters should think carefully about how to make their application stand out if they want to secure their non-negotiables, such as a private garden or a parking space."

"Similarly, landlords face competition when it comes to appealing to top-tier renters, who can offer more than simply matching the asking price a little investment now to secure stable, long-term tenants could pay off if it means spending less money down the line on repairs and having fewer gaps between occupants."