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Summary
- The RICS survey says after a seven-month continuous rise in new buyer enquiries, January recorded a drop.
- For agreed sales, -18 per cent reported a drop as compared to +15 per cent that reported higher sales in December.
The third lockdown imposed in the UK has cast a shadow on its property market. In its monthly survey RICS (the Royal Institution of Chartered Surveyors) stated that after a seven-month of continuous rise in new buyer enquiries, January recorded a drop.
A net balance of -28 per cent of chartered surveyors said there was a decline in new buyer enquires in January, signifying a drop in demand. The proportionate difference between respondents who reported lower enquiries and those who saw an increase is referred to as balance.
For agreed sales, -18 per cent reported a drop as compared to +15 per cent that reported higher sales in December. A net balance of -38% of surveyors said that for new properties going into the market there was a fall in demand, the first drop since May 2020. New appraisals are undertaken over the month also dropped. The respondents said that sales would drop even more in the coming months.
Some estate agents even said that sellers were still reluctant to put their property for sale till lockdown restrictions eased and purchasers too are still not keen on viewing the property in person, yet.
As the global economy is reeling under the economic impact of the pandemic, its effects were visible in the property market with property prices in London entering the negative terrain for the first time since July with a net balance of -9 per cent of surveyors reporting a fall in prices.
However, the survey had something to cheer for, in terms of demand in the rest of the UK. A net balance of +50 per cent of the respondents reported an increase in property prices in January across the country barring London.
Simon Rubinsohn, RICS chief economist, said that despite the slowdown in January, the overall transaction numbers in the next couple of months are likely to remain firm, as many deals will get completed which had been agreed through the back end of 2020.
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Another survey by Halifax had found that property prices in the UK saw its sharpest crash since April as the stamp duty holiday announced by the government to encourage buying, lost pace. The government had announced stamp duty holiday on homes under £500,000 in England and Northern Ireland. The scheme ends on 31 March.
House prices had dropped 0.6 per cent in April when the pandemic started. Halifax found that UK property prices fell 0.3 per cent month-on-month in January to an average of £252,000. Nationwide Building Society found that property prices fell for the first time in January since May or June as demand softened before the stamp duty holiday ends on March 31.
The property market in the UK had crashed in the first lockdown but later picked up pace as demand for bigger homes saw a rise.
