UK residential market ends 2024 on a firm footing

RICS UK Residential Survey December 2024

• House sales see growth in December.
• Buyer enquiries continue to grow albeit at a slower pace and respondents report increases in new instructions.
• House prices now rising across all parts of the UK.
• Demand for rental properties stabilises but squeezed supply continues to push rents higher.

The RICS UK Residential Property Survey for December 2024, reports growing activity in the housing market with 2024 capped off in a generally upwards trend.

House sales continue to see an upward trend with +5% (net balance) of respondents reporting an increase in new buyer enquiries. While this is down from the +11% readings posted in November and October, sales volumes have picked up with a net balance of +7% of respondents indicating sale growth, compared to a figure of +1% in November.

New instructions, which measures properties placed for sale, saw a bounce, potentially due to stamp duty changes in March, with a net balance of +14% reported. This is the sixth consecutive month where respondents have indicated an increase in houses being listed for sale.

House prices are now rising in every region of the UK. Northern Ireland and Scotland report the strongest price growth currently.

In the lettings market, tenant demand has stabilised however, respondents expect further rent rises (+37%), likely due to a continued trend of landlords placing their properties for sale (net balance +37% from +29% in November.) leading to a lack of supply for tenants. So whilst demand is broadly flat, supply is diminished, leading to a lack of available property to rent and price rises.

Rising gilt yield present a potential challenge for the housing market over the coming months although for now at least, respondents to the survey remain reasonably upbeat about the medium term outlook.

RICS Chief Economist, Simon Rubinsohn, said: "The latest results from the RICS Residential Market Survey points to a further improvement in sentiment in the housing market despite concerns about the potential impact of rising bond yields on borrowing costs. Buyer enquiries rose once again, albeit at a slower pace than in November, and the headline price indicator also moved higher.

"More significantly, the signals from the survey around expectations over the next twelve months also remain solidly positive for now. However, the resilience of the uplift in market mood could be tested if the mortgage rates do begin to climb in a material way over the coming months. That, critically, would also be a concern for developers who will want to see a solid market as a backdrop for ramping up housebuilding to help meet the government’s ambitious 1.5 million homes target for this parliament.”

-ENDS-

Notes for editors:

The full report may be found at this link. Commentary from survey respondents regionally can be found in the economic pdf on the back pages - you are free to use these.

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