The September 2020 Royal Institution of Chartered Surveyors (RICS) UK Residential Survey results continue to point to a strong upturn in activity across the market, as indicators on enquiries, agreed sales and new listings all remain strongly positive.

During September, RICS found that a headline net balance of +52% of respondents reported an increase new buyer enquiries.

This marks the fourth consecutive monthly pick-up in demand, albeit showing a slight moderation compared to the +75% and +63% seen in July and August, respectively.

RICS: Demand on the up but estate agents warn over market issues

New instructions coming onto the sales market also rose for a fourth month in a row, which now signifies the longest stretch of rising supply going back to 2013.

A net balance of +48% of contributors reported that appraisals were up annually, and therefore the pipeline for instructions over the coming months appears to be solid.

However, despite the recent improvement, stock levels remain relatively low in a historical context (averaging 42 properties per estate agent branch).

Alongside this, a net balance of +55% of respondents noted an increase in agreed sales over the month (broadly in-line with August’s reading of +61%).

The regional breakdown showed that sales continued to rise across all parts of the UK, led by exceptionally strong growth in East Anglia, the South West and Yorkshire & the Humber.

In the near-term outlook, respondents expected the upturn in sales to continue over the coming three months, with the latest net balance coming in at +17% compared to +21% previously.

However, 12-month sales expectations moved deeper into negative territory, posting a net balance of -34%, down from -17% in August.

Contributors cited potential job losses across the economy once the furlough scheme is withdrawn as a significant risk for market activity further ahead.

Nevertheless, house price growth has continued to gain momentum, as the survey’s headline indicator on prices climbed once again to post a net balance of +61% (up from +44%).

All parts of the UK have now seen prices rise to a greater or lesser degree, although the rate of inflation appears to be more modest in London compared to all other regions.

A net balance of +23% of contributors envisaged prices continuing to rise over the coming three months at the national level.

Likewise, 12 month price expectations remained in modestly positive territory, although sentiment varied by region.

Areas such as the North West and Wales displayed strong expectations for prices in the year to come, projections were flat to slightly negative in the North East, Yorkshire & the Humber, the West Midlands and London.

In the lettings market, tenant demand reportedly rose for the fourth month in succession; London now stands out as the only area in which a negative trend in tenant demand was cited in September.

This recent dip in demand has been reflected in short-term rental growth expectations across the capital, with a net balance of -67% of contributors anticipating rents in London will fall over the next three months.

By way of contrast, the national three-month rental expectations indicator returned a positive reading of +19%.

Alan Cleary, managing director for mortgages at OneSavings Bank, said: “Evidence from the latest RICS market survey shows house prices rising strongly and tenant demand remaining firm in September, though falling a little from the high levels reached in July and August.

“Rising house prices should provide a natural support to rental growth. The immediate outlook is for a period of robust growth in overall levels of housing market activity, with transactions and prices continuing to drift upward.”