Thursday 8 October 2020 12:01 am

UK housing market remains buoyant but braces for downturn

The UK housing market remained buoyant last month as the post-lockdown bounce continued, however experts have warned that sales are expected to weaken in the year ahead as unemployment rises. 

The latest survey by the Royal Institution of Chartered Surveyors (Rics) showed that buyer enquiries, agreed sales and new listings were strong in September. 

Read more: UK housing market continues strong recovery as prices surge

Research published this morning showed that 52 per cent of survey participants reported an increase in new buyer enquiries, marking the fourth consecutive month of increasing demand.

New instructions also rose for the fourth month in a row, which is the longest stretch of rising supply since 2013.

55 per cent of those surveyed said there had been an increase in agreed sales across the UK during September, driven by strong growth in East Anglia, the South West and Yorkshire & Humber. 

Read more: UK housing market surges in busiest month in 10 years

The upturn in sales is expected to continue over the next three months, but over the long term experts expect growing job losses to slow the momentum.

Meanwhile house prices have continued to grow across the country, although the rise was more modest in London compared to other regions of the UK. 

Rics chief economist Simon Rubinsohn said: “The latest Rics survey provides further evidence of the buoyancy of the housing market with more buyers and sellers helping to boost activity across the country.

“However there is increasing concern that the combination of significant job losses over the coming month allied to the scaling back of policy initiatives in early 2021 will have an adverse impact on transaction levels.

Read more: UK mortgage lending rises in July as housing market picks up post-lockdown

“Meanwhile there is little sense this softer sales picture will be accompanied by very much easing in the momentum around prices and rents adding to the ongoing challenge around affordability”.

He added: “Recent government announcements around planning reform have a role to play in addressing this issue as does the focus on low cost home ownership but it is critical that the focus remains squarely on delivering more homes across all tenues to ensure that access to housing is improved and that the fears around a sharp rise in homelssness proves unwarranted.”

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