Refreshed optimism as activity continues to grow in region's housing market

According to the January 2020 RICS UK Residential Market Survey, the number of agreed sales and new homes being listed for sale improved over the month.

A net balance of plus 47 per cent of respondents reported a rise in the number of homes being listed for sale, up from plus 14 per cent in December.

In addition to the increase in homes being put up for sale, January saw an increase in the number of people looking to buy, as new buyer enquiries rose to a net balance of plus 28 per cent from plus 16 per cent in December.

As well as this, agreed sales rose for a second month in a row.

Looking ahead, respondents to the survey expect this refreshed optimism to continue with sales anticipated to rise across the West Midlands, both in the near term and for the year to come.

This up-turn in activity is also reflected in the level of market appraisals undertaken over the month, which was higher than a year ago, marking the first positive reading for this series since it was introduced in 2017.

Despite the improvement it follows a sustained period of falling supply, meaning average stock levels remain relatively low at an average of 31 properties per branch.

As sales activity improves, house price pressures appear to be building. The West Midlands’ price net balance moved up to plus 30 per cent in January, after seeing a notable increase in December.

John Andrews, of Doolittle & Dalley in Kidderminster, said: “More properties are coming available and indications suggest the market is getting more active which is likely to continue into spring, helped by confirmation that interest rates will remain unchanged.”

In the lettings market, demand for rental properties rose in the three months to January, with a net balance of plus 35 per cent of respondents citing an increase. For the 15th successive quarter, the number of new rental properties being listed for rent fell, with a net balance of 23 per cent of respondents reporting a fall. Given this sustained mismatch between rising demand and falling supply, rents are expected to rise in the next three months.

Simon Rubinsohn, RICS chief economist, said: “The latest survey results point to a continued improvement in market sentiment over the month, building on a noticeable pick-up in the immediate aftermath of the General Election.

"The rise in new sales instructions coming onto the market is a noteworthy and much needed development, given the lack of fresh listings over the past few years had pushed stock levels to record lows. It remains to be seen how long this new-found market momentum is sustained for, and political uncertainty may resurface towards the end of the year. But, at this point in time, contributors are optimistic regarding the outlook for activity over the next 12 months.”