Sales Expectations Rise as General Election Uncertainty Clears, Reports RICS

In the aftermath of the recent General Election, sentiment about sales volumes among surveyors and estate agents has reached its most positive level in over two years, according to the Royal Institution of Chartered Surveyors (RICS). The June RICS Residential Market Survey highlighted subdued market activity leading up to the election, but indicated increased optimism for the months ahead.

For the local market in Rugby this national trend is particularly relevant. The pre-election period often brings uncertainty, impacting buyer confidence and slowing down market activity. However, with the election concluded and a clear political direction established, both buyers and sellers can look forward to a more stable and predictable market environment.

The survey indicated a slowdown in the flow of new instructions to the sales market last month, with a net balance reading of -9, and a flat level of market appraisals. Additionally, the measure of new buyer enquiries posted a net balance reading of -7% during June, marking the third consecutive month of slowing enquiries. Similarly, the newly agreed sales gauge posted a net balance of -7% in June, slightly less negative than the -13% reading from the previous month. These figures reflect a brief period of recovery earlier in the year, followed by a downturn as the election approached.

Despite these short-term challenges, the outlook is promising. A net balance of +20% of respondents now predict that residential sales volumes will recover over the next three months. This is a significant improvement from last month's +10% reading and represents the most positive near-term sales expectations since January 2022. For prospective homebuyers and sellers this renewed optimism could signal a more active and competitive market, providing opportunities for both sides of the transaction.

Regarding house prices, the report reveals a mixed outlook. A net balance of +41% of respondents expect prices to increase over the next 12 months. However, in the short term, more respondents are anticipating a drop in prices due to ongoing affordability pressures. This could mean that while the long-term prospects for property value growth remain strong, there may be some opportunities to secure properties at more favourable prices in the near term.

Tarrant Parsons, a senior economist for RICS, highlighted several factors that could support market recovery in the coming months. Parsons noted, “If the Bank of England decides that the current inflation backdrop is benign enough to start loosening monetary policy next month, this may prompt a further softening in lending rates. Additionally, the recent election delivered a clear outcome, with housing pushed up the political agenda.”

For homebuyers and sellers in Warwickshire, these developments are particularly pertinent. The potential for reduced lending rates could make mortgages more affordable, encouraging more buyers to enter the market. And with housing becoming a key focus in political discourse, there may be new policies and initiatives aimed at supporting the housing market, further boosting confidence and activity.

The recent RICS report paints a cautiously optimistic picture for the UK housing market post-election. For those in Rugby the clearer political landscape and potential economic adjustments could create a more favourable environment for both buying and selling homes. As estate agents like Ellis Brooke continue to navigate these changes, staying informed and responsive to these trends will be crucial in helping clients make the best decisions in this evolving market.