Estate agents are receiving more calls and emails from would-be homebuyers than they have in more than two years and expect to get busier still over the months to come.
After a couple of years during which many agents struggled to drum up interest in their listings, a majority have reported a recovery in demand this year.
In a poll by the Royal Institution of Chartered Surveyors, a net 8 per cent of agents reported an increase in new buyer inquiries in March. That marked a third consecutive month of strengthening demand and was the most positive reading since February 2022.
The response from agents chimes with other industry figures, which suggest that the housing market is beginning to emerge from the slump it fell into almost immediately after Kwasi Kwarteng’s mini-budget in September 2022. The fall in mortgage rates from their peak last summer has helped to spur demand, as have the absence of a dramatic drop in house prices and an easing in the cost of living crisis.
Although prospective buyers are starting to re-emerge, their renewed interest has yet to translate into a rise in sales, with a net 5 per cent of agents agreeing fewer sales in March than they had done in February. Most, however, expect activity to improve over the summer and their optimism grows the further down the line they look: the vast majority believe they will be selling more homes in a year’s time than at present. That optimism is shared by agents nationwide, apart from those in East Anglia, who are slightly more cautious.
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With the market looking to be bouncing back, more sellers are putting their homes up for sale, having sat on their hands for most of the past 18 months. A net 13 per cent of respondents won more new instructions last month than they had done in February, while most also reported a rise in the number of valuations they had been asked to carry out.
Tarrant Parsons, senior economist at the institution, said the potential for mortgage rates to fall further later in the year “should continue to support the market to a certain degree going forward”. However, he warned that a rapid rebound was unlikely, “given mortgage rates are set to remain much higher than” they were before the mini-budget.
House prices were “largely stable”, the survey suggested, with most estate agents noting little movement last month. Prices are rising quickly in Northern Ireland, while those in the East Midlands remain under most pressure.
The expectation among estate agents is that prices will rise over the coming year. Sentiment is said to be “particularly robust” in Northern Ireland, Scotland and London. Kirby O’Connor, managing director of GOC Estate Agents in Belfast, said there was “not enough stock for demand”.
In the rental market, letting agents do not expect an end to soaring rents. Demand from tenants, although not as strong as it was last autumn, is growing, while most agents have reported another fall in the number of homes available to rent.
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As a result, a net 34 per cent of respondents expected rents to continue to rise over the next three months, although that was the lowest reading since January 2021. Rents were predicted to rise across all regions, except for East Anglia. “For the first time in a long time, we have seen tenant demand drop marginally,” David Boyden, managing director of Boydens in Colchester, Essex, said.
