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RICS concerned about the ‘prospect of a sharp slowdown in transaction activity’

Residential property sales have continued to increase in recent weeks, but surveyors are expecting a slowdown early next year.

Property buyers have been rushing to benefit from a temporary stamp duty holiday, but with the deadline just over three months away, there are growing signs that demand is “losing a bit of steam” in some areas of the UK, according to the Royal Institution of Chartered Surveyors (RICS).

However, the predicted slowdown in activity levels is not expected to lead to a decline in property prices.

Simon Rubinsohn, RICS chief economist, said: “It is clear from responses to the latest survey that there is considerable concern about the prospect of a sharp slowdown in transaction activity following the end of the first quarter of the coming year.”

He added: “There is little sense that the projected softer sales picture will feed through into pricing which is viewed as likely to prove rather stickier in the face of ongoing macro challenges.”

There are no real surprises in this latest sentiment-based survey from RICS, according to Sam Hunter, chief operating officer of Homesearch.

He commented: “In many ways is reassuring as it completely chimes with what we’re hearing from the coalface.

“Although buyer demand is still strong, according to the agents in our Network, it does seem as though activity has cooled slightly over the last few weeks.

“Whether or not this is as a result of the lead up to Christmas temporarily distracting would-be movers as is the norm at this time of year, or because buyers are now concerned about the ability to complete before the end of March stamp duty deadline is, however, harder to determine.

“Another interesting element is that the overall view from the RICS survey this month appears to be that levels of house-price inflation will cool in the mid-term from the record highs we’ve seen over 2020, albeit that values will maintain a more steady upwards momentum in 2021.

“Again, talking to our agents we’re hearing that prices are topping out in many towns and cities – not as a consequence of buyers refusing to meet asking prices per se, but more due to the concerns of mortgage down vals leading agents to advise their clients to price realistically in order to complete their sale without hiccups, especially if they are aiming to complete in time to save the stamp duty on their next purchase. Until we know if there will indeed be the much-speculated extension, it’s prudent advice.”

Original Article from Property Industry Eye 10/12/2020

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