With new buyer demand rising over the course of January with steady sales expected to rise further in the first quarter of this year, what does this mean for surveyors across the country? Property Inspect takes a look at the most recent RICS UK Residential Market Survey to highlight the findings and explore what surveyors can do to adapt to the changing landscape.
In January this year, the Royal Institute of Chartered Surveyors published its latest UK Residential Market Survey, a document expertly pieced together by the professional body for surveyors in collaboration with RICS members from the length and breadth of the country.
Typically, the report is used by the government and the Bank of England as an indicator of the condition of the residential sales and lettings market, with many surveyors, industry practitioners and investors citing it as a top tier source of information regarding the market.
As a result, RICS UK Residential Market Surveys are often covered in the mainstream media both at home and abroad, serving as a touchstone for the changing shape of the industry.
While it remains to be a valuable document for valuations in particular, in part due to its in-depth sales and lettings market charts, its findings still speak to the wider market, revealing key insights regarding timeframes and volume – data points that are both vitally important for practitioners – backed up by snapshots of commentary from RICS members nationwide.
New buyer enquiries gain momentum
In the RICS UK Residential Market Survey, attention was drawn first and foremost to the rise in new buyer enquiries, though RICS caveat this finding with the fact that the results were collected before the Bank of England increased interest rates.
However, many of the respondents who collaborated with RICS on this report still expect house price and sales activity growth.
“With respect to new buyer demand, a headline net balance of +16% of respondents cited an increase in enquiries during January,” states the report. “This is up from a reading of +9% in December and, although only modestly positive, represents the strongest figure since May 2021.”
Colin Townsend MRICS, a Chartered Quantity Surveyor at John Goodwin, evidenced this point, commenting that the year has started steadily with plenty of new buyers registering interest, although new stock was short.
“Looks as though prices are going to continue rising albeit more modestly than last year perhaps,” Townsend concludes.
| For the RICS UK Residential Market Survey, data is measured through net balance, which is the proportion of respondents reporting a rise minus those reporting a fall. For example, if 40% of respondents reported a rise and 10% of respondents reported a fall, the net balance will be 30%. |
The survey’s indicator of new instructions showed a -8% net balance. While this remains negative, it is the least negative it has been since April 2021, so there is still some growth albeit slight and slow. Market appraisals, which according to the report measures “the trend in relation to the comparable period twelve months ago”, rose above zero for the first time since June 2021, coming in at +3%.
Elsewhere, the report highlighted a +74% net balance of survey respondents noting an increase in house prices, in line with Nationwide’s house price index and other industry research documents. The report states that over the past six months this metric has consistently sat between +69% and +74%, with respondents from the North West and South East of England claiming sharper rates of growth than other areas – though all UK regions can anticipate house prices picking up throughout the year.
What does this mean for Surveyors?
As a long-standing RICS Tech Partner, Property Inspect looks closely at each UK Residential Market Survey so we can better respond to our clients. One of our core goals has and always will be to speed up their processes and help them work as efficiently as possible.
Though the report itself draws no conclusions for surveyors, the data put forth by RICS indicates a busy schedule over the coming three, six and twelve-month periods.
As the UK housing market goes through the shifting stages of recovery, practitioners are experiencing the pendulum swing from not having enough work to having too much. This is partly impacted by the drop in surveyor numbers over the last decade, which is in itself a direct result of housing demand dropping in the wake of the 2008 recession.
Now, as demand rises again, securing the services of a surveyor has become a sticking point, with some surveyors even turning work down. This has wider implications for the entire property ecosystem, not least mortgage lenders and banks, as well as the buyers themselves who might fail to secure a mortgage or miss out on favourable rates.
So, what does that mean for surveyors? Well, efficiency is key. In order to cope with the imminent increase in workload, working smarter should be at the top of the agenda for practices across the country.
Although an overwhelming majority of report participants talked of a lack of supply, surveyors should still take note – indicators point firmly towards an increase on the horizon. It stands to reason then that the exceptionally high demand each time a property is marketed means that properties are only on the market for just a few short days, highlighting once again the need for the kind of efficiencies Property Inspect enables.
By giving our clients the software to conduct their RICS home surveys and reports digitally, they are afforded the agility needed at this time to respond to market conditions quickly. As any surveyor will know, when workloads become overwhelming, mistakes can happen. This is why we set out to ensure a thorough, streamlined and efficient surveying and reporting process through the Property Inspect app.
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