Development Finance News:-New instructions have continued to drop with the poorest reading since June 2016, according to the Royal Institution of Chartered Surveyors’, RICS, residential study for April.
The professional body attributes the slump to Brexit uncertainty and points out the national house price net balance was unchanged in April at minus 23 per cent. This contrasts with the Halifax house price index released earlier this week showing a 5 per cent rise in the value of property sales.
RICS said London, the South East and the South West were regions where prices were under pressure. But pointed out that Scotland and Northern Ireland had bucked the trend with prices increasing.
RICS chief economist Simon Rubinsohn, said respondents were unconvinced that housing activity would pick up soon.
“Significantly, the key RICS buyer enquiries indicator remains subdued and sales expectations looking a year out are only modestly positive. Although the new build is generally performing more strongly than the existing market, the challenging narrative around housing is likely to have some impact on the delivery pipeline making it harder to meet the ambitions for supply the government has set itself.”
RICS said sellers were more realistic over prices with nearly two-thirds of respondents reporting parity on asking and selling prices – up from 57 per cent of survey participants back in October 2018.
Near future looks more positive
“Looking ahead, near term sales expectations remain negative, and, expectations still point to a flat or declining sales trend across all parts of the UK in the coming three months. Further out, however, a headline net balance of +13 per cent of contributors anticipate sales will begin to pick up to some extent over the next 12 months,” said Rubinsohn.
Development Finance -HZA
Finance brokers Hank Zarihs Associates said developer activity in terms of sourcing construction loans, fast bridging finance and property development funding for new builds was strong. Chief executive, Shiraz Khan, said builders were doing their utmost to try and hit the Government’s ambitious targets of delivering 300,000 homes a year by the mid-2020s
The professional body said tenant demand continued to climb slowly while landlord instructions dwindled, extending a run of successive quarterly declines dating to the middle of 2016. It said this was already the longest uninterrupted sequence of falling landlord instructions since the series started in 1998.
Contributors said the upcoming lettings fee ban and the proposed scrapping of section 21, making it harder to evict tenants, could lead to more landlords exiting the market.
It projected rents to rise by around 2 per cent at the national level over the coming 12 months, with growth seen accelerating to average 3 per cent per annum over the next five years.
The survey polls more than 400 estate agents at 700 branches in England and Wales with the net balance representing the proportion of respondents who report a rise versus a fall.