London, 10 October 2024: The September 2024 Royal Institution of Chartered Surveyors (RICS) UK Residential Market Survey reveals a positive shift in the housing market, with demand, sales, and listings showing steady improvements. The findings highlight a gradual recovery, particularly as new buyer enquiries and sales volumes continue to rise, offering a cautiously optimistic outlook for the months ahead. However, regional disparities and challenges in the rental market remain pressing concerns.
In an official press release, RICS President, Tina Paillet, praised the new government’s approach to housing, stating: "As we approach the 100-day mark of the new government, it is encouraging to see housing prioritised so strongly. The government has moved quickly to outline ambitious planning reforms and set housing targets aimed at increasing supply. Proposals for new towns, urban expansions, and the creation of 'greybelt' land demonstrate a clear commitment to addressing the country’s housing challenges. Now, it is crucial for developers and investors to feel confident that these reforms will not create planning, skills and resources bottlenecks, so we can make meaningful progress toward the goal of delivering 1.5 million new homes."
New buyer enquiries showed a net balance of +14%, marking the third consecutive month of positive demand growth, while agreed sales recorded a net balance of +5%, in line with last month’s performance. Though these figures reflect modest gains, they indicate a recovery from the stagnant conditions earlier in the year. Forward-looking sentiment is also positive, with +23% of respondents expecting sales to increase over the next three months and +44% forecasting growth over the next year.
RICS Head of Market Analytics, Tarrant Parsons, said in the press release: "The latest survey results once again convey a brighter picture for housing market activity, with the recent easing in mortgage interest rates continuing to support a recovery in buyer demand. Critical for the outlook, a further unwinding in monetary policy is anticipated over the months ahead, which should create a more favourable backdrop for the market moving forward. In keeping with this idea, forward-looking sentiment data from the survey points to sales volumes gaining impetus, both in the near-term and over the next twelve months."
Supply levels have also improved, with a net balance of +22% of respondents reporting an increase in new listings, pushing the average number of available properties per branch to 44.6, the highest level since December 2020. This rise in supply is vital in addressing the growing demand seen across much of the UK. However, house prices are also beginning to rise, with a national net balance of +11%, marking a clear departure from the stagnant or declining price trends seen over the past year. Although most regions are experiencing growth, the West Midlands, South West, and East Anglia continue to lag behind.
The rental market remains a concern, as tenant demand continues to outpace supply. A net balance of +22% of respondents reported an increase in tenant demand, while landlord instructions continued to fall, with a net balance of -29%. This imbalance is expected to drive rents higher, with +39% of respondents predicting rent increases in the coming months.
Commenting on the rental market, Tina Paillet added: "RICS survey results continue to highlight the pressures on renters, with demand consistently outstripping supply. While the Renter’s Rights Bill aims to improve standards and offer better protections for tenants, we must ensure that these reforms do not discourage responsible landlords from remaining in the market. Most importantly, the planned changes in the private rental sector fall short of tackling the core issue: increasing supply and making housing more affordable for tenants."
Overall, the survey paints a picture of a market slowly regaining momentum, supported by improved buyer demand, rising listings, and recovering house prices. However, challenges remain, particularly in the rental market, where the imbalance between supply and demand continues to put pressure on tenants. As the market looks ahead, the government’s ambitious housing reforms will play a crucial role in shaping its trajectory.
