The headlines surrounding today’s new RICS market snapshot will concentrate on dramatic house price falls but the drop off in the sales market activity stands in contrast to clear growth in the lettings market. 

RICS says tenant demand continues to rise, evidenced by a net balance of 35 per cent of respondents reporting a pick-up in November. 

Concurrently, the flow of fresh supply becoming available on the rental market continues to dwindle, as a net balance of minus 27 per cent of respondents highlighted a decline in landlord instructions this month. 

Consequently, what RICS calls “the ongoing misalignment between rising demand and falling supply” continues to drive rents higher. A headline net balance of 43 per cent of contributors anticipate rental prices moving higher over the coming three months, although this is somewhat moderate when compared to a recent high of 66 per cent back in February this year.

However, this morning’s RICS residential survey also shows overall activity continuing to weaken across the sales market, with higher interest rates and a difficult macroeconomic outlook both taking their toll on buyer sentiment. 

For the seventh month in a row, buyer demand continued to fall, with the net balance coming in at minus 38 per cent. 

Whilst this is less negative than the minus 53 per cent reported in the previous month, the market remains in a firmly downward trend with indications that this will continue in the near term.

For agreed sales, a national net balance of minus 35 was reported over this survey period indicating a continued decline in sales activity. Again, this is marginally less negative than the reading of minus 45 per cent posted in October, but this is also the second month in a row that respondents across every UK region reported a decline in agreed sales, demonstrating what RICS says is now a consistently negative picture at the national level.

The survey’s measure of new instructions coming onto the sales market also remains in negative territory, posting a net balance of minus nine per cent at the national level.