Stretched mortgage affordability continues to weigh on the housing market in Wales last month as buyer demand and agreed sales fell, research by surveyors suggest. Activity in the Welsh housing market remains weak but more properties are coming onto the market, according to the latest survey from the Royal Institution of Chartered Surveyors (RICS).
A net balance of -46% of Welsh property professionals reported new buyer enquiries in February, indicating sharp falls in demand. Meanwhile, a net balance of -52% of professionals recorded for newly agreed sales.
However, in terms of supply, more homes were reported to be coming onto the market for sale. A net balance of +12% of surveyors reported instructions to sell – the second month in succession that professionals saw more homes being listed for sale.
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Surveyors though remain cautious in their outlook for the next three months. The net balance for price expectations in Wales is now -34% of respondents, and for sales expectations it is -44%.
Survey respondents in Wales are less pessimistic about activity on a 12-month horizon though. The net balance for sales expectations over the next year is zero, pointing to a flat sales picture in 2023.
Anthony Filice FRICS of Kelvin Francis, Cardiff, said: “The numbers of viewings are fewer, but those looking are serious. A healthy number of sales are therefore being agreed, many at full asking prices, or near.”
Melfyn Williams MRICS of Williams & Goodwin The Property People in Anglesey & Gwynedd said: “Looking forward to Spring market when we anticipate the traditional time of year for an upturn in activity. The market as expected though is more price sensitive now.”
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Tarrant Parsons, Senior Economist, said: “The housing market continues to adjust to the tighter lending climate, with stretched mortgage affordability still weighing heavily on activity.
“Given the ongoing weakness in demand, house prices remain on a downward trajectory, and are expected to see further falls through the first half of the year at least.
“Going forward, near-term expectations suggest market activity will remain generally subdued over the coming months, although the latest survey feedback shows tentative signs that the ongoing decline in buyer enquiries is now moderating”.
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