RICS report low activity in the UK housing market – July 08

This month the RICs published their UK housing market survey. Key highlights were:

– Average number of transactions (sales) fell further
– More Surveyors reported a fall than a rise in house prices
– Demand is weak with the balance of surveyors reporting new buyer enquiries still well into negative territory.

However:

– Surveyors report that some buy-to-let investors are entering the market and ‘predatory buyers’ are looking for bargains in a falling market.
– The lack of new instructions to sell property continues to provide a layer of support to the market.
– Large numbers of repossessions or sales from those attempting to avoid repossession have not taken place.

TBPL View:
We are yet to see panic sales or reaction in the buy-to-let market that could collapse the market by flooding supply, nor are we seeing a rise in distress sales from owner occupiers.

The view of (residential) rental property as a long term investment by well-advised investors has probably provided a less reactionary response than some had predicted.

Investors entering the market at this time are aware of their purchasing strength and will be seeking bargains from those unwilling to hold on to property in the face of a declining market.

Sources:

RICS UK housing market survey (15 July 2008).

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