House prices in Wales continue to rise but enquiries and sales are lower

Demand and sales were lower in the housing market in Wales during June and expectations for the next few months are muted, according to the latest Royal Institution of Chartered Surveyors (RICS) survey.

In relation to new buyer enquiries and newly agreed sales, the net balances were both in negative territory at -23 and -5 respectively. This indicates that fewer potential buyers were seen in the market during the month than in May and fewer sales were going through.

Short-term expectations for the market in Wales are also muted, with a net balance of +5 for price expectations and -16 for sales expectations. This indicates that over the next three months respondents, on balance, expect prices to rise marginally and sales to edge lower.

Respondents indicated that the number of properties coming onto the market in June increased, but this comes off the back of a longstanding lack of supply. Indeed, stock on agents’ books in Wales is at a historically low level. As a result of this lack of supply, prices continued to edge upwards despite lower demand.

According to the June report, a net balance of +67% of respondents in Wales saw prices rising, with anecdotal evidence from respondents suggesting that the imbalance between supply and demand is a factor in pushing up prices.

Anthony Filice FRICS from Kelvin Francis Ltd said: “The number of properties coming onto the market is increasing but they are taking longer to sell. Demand is reducing, and if sales aren’t agreed early on, it can be a long process. However, properties are still selling.”

Commenting on the UK picture, RICS Chief Economist, Simon Rubinsohn said: “Pricing across much of the housing market remains resilient for now with a shortage of stock continuing to be a feature highlighted by many respondents to the survey. Although buyer enquiries have predictably slipped a little of late, this needs to be placed in the context of the healthy level of demand in previous months.  A probably even more striking aspect of the latest report is the concern being voiced about the rental market. A combination of a lack of social housing development allied to more onerous changes in the private lettings market is exacerbating the imbalance between demand and supply leaving the rent expectations metric pointing to further strong growth in the midst of the worsening cost of living crisis.”