Residential activity fell in January for the first time in seven months, according to the latest RICS UK Residential Survey.

At headline level, a net balance of -28% of respondents reported a decline in new buyer enquiries over the month.

The decline ends the seven consecutive positive monthly readings beforehand, the data shows.

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Looking to the number of new listings, a net balance of -38% of respondents reported a fall.

Prior to January, new instructions had increased month-on-month since May 2020.

The number of appraisals undertaken over the month was reportedly below that of the corresponding period last year, with the data outlining a net balance of -26%.

In addition, a national net balance of -18% of respondents cited a fall in agreed sales during January.

Focusing on the future, near term sales expectations noted a net balance of -29%, down slightly on the -23% posted in December.

Further ahead, the 12-month outlook reported a net balance of -4%, compared with -6% in December.

Turning to house prices, a net balance of +50% of survey participants saw an increase in January which represents a decline from +63% the month prior.

Price expectation at the national level, noted a net balance of +30% of respondents anticipating prices to rise.

In the lettings market, tenant demand rose in the three months to January, posting a net balance of +12% of contributors noting an uptick.

Tomer Aboody, director of property lender MT Finance, said: “As the property market waits with baited breath for March’s Budget, there has been an inevitable decline in transactions.

“Fear of the unknown is not helpful as far as market confidence is concerned.

“In the wider market there is hope that the Chancellor will provide more stimulus, whether that be in the form of a shakeup of stamp duty, even abandoning it completely or at least reducing it for downsizers.

“This would have the welcome effect of bringing more properties to market, putting a lid on price increases.

“Further continuation of financial assistance for companies would also be extremely welcome.

“The national lockdown is not helping the housing market.

“Although officially it remains open for business, many people are clearly waiting for lockdown to be relaxed before they continue with their sale or purchase.

“The Chancellor may be accused of kicking the can down the line if he opts for further assistance, it could turn out to be the way forward to ensure the economy doesn’t suffer irreparable damage in the short term.’

Jeremy Leaf, north London estate agent and a former RICS residential chairman, added: “There is no doubt that activity in the housing market is no longer at the dizzy heights that it was in the months before Christmas.

“Demand has weakened as the chances of gaining from the stamp duty holiday at the end of March have receded and lockdown restrictions have taken their toll.

“Nevertheless, on the ground, most sales are proceeding and very few are being re-negotiated but there is no doubt that transaction numbers will be considerably lower in the second quarter than they are in the first of 2021.

“Looking forward, we don’t expect a major correction in prices due to the shortage of suitable stock at the right price and in the right areas, as well as the inevitable re-emergence of pent-up demand when present restrictions begin to be lifted as vaccination rates pick up.”

John Eastgate, managing director of Property Finance at Shawbrook Bank, said: “The stamp duty holiday has become the latest ill thought through initiative that the property market has been landed with.

“These figures show just how much it has distorted consumer behaviour.

“Suggestions of an extension or tapered end to the incentive are welcome, but what the market needs is a sustainable, long-term approach from government.

“Although well intentioned, the stamp duty holiday becomes the next in a line of tactical initiatives that have created more problems than they solved.

The government must intervene to avoid the damage that a cliff-edge end to the holiday will bring.

“It should adopt a more considered approach to housing that will avoid the need for knee-jerk responses in the future, thus creating that much needed stability.

“The reality is that the fundamentals of the supply and demand imbalance coupled with ever increasing affordability challenges for first-time buyers will sustain property prices beyond the end of the holiday.

“Property investment is not a short term game and committed investors looking for long term gains should remain confident in the future of the housing market.”