Concerns over housing market deepen - RICS

Concerns about prospects for the housing market deepened as activity stayed strong in the short term, a RICS survey showed.

Sales, new listings and enquiries increased in September, continuing the post-lockdown upturn in the market, the Royal Institution of Chartered Surveyors' monthly survey found.

New buyer enquiries picked up for the fourth month running, though the rate of increase eased to +52% from +63% the previous month. Supply increased for a fourth month, marking the longest stretch of new instructions since 2013.

Agreed sales also rose across the UK led by East Anglia, the South West and Yorkshire and the Humber. Respondents said they expected the upturn to continue for the next three months.

However, the mood about sales over the next year became gloomier as the net balance dropped further into negative territory to -34 from -17 a month earlier.

The housing market has taken off fuelled by pent-up demand from the Covid-19 lockdown, Chancellor Rishi Sunak's stamp duty holiday and households moving to adapt to new ways of working. But some economists are warning the market could crash when the stamp duty break ends in March and government support for jobs is watered down.

Simon Rubinsohn, RICS' chief economist, 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."

RICS' survey adds to a picture of a short-term boom in the housing market but with more difficult times looming Halifax's house-price survey for September showed a sharp annual increase and high levels of mortgage borrowing but the lender warned on Wednesday that downward pressure on prices was on the way.