New buyer enquiries posted a net reading of -5% in May, indicating that the market is stabilising after plummeting the month before, RICS UK Residential Market Survey has found.
Near term sales expectations are broadly neutral, with a net balance of -4%, while 12 month expectations are slightly positive, with a net 10% expecting sales to increase.
In terms of how RICS have perceived house price changes over the past three months, -32% saw them fall, down from -22% in April.
Jeremy Leaf, north London estate agent and a former RICS residential chairman, said: “There is no doubt that there has been some release of pent-up demand as buyers and sellers emerge from enforced confinement, with many realising their present properties are unsuitable and trying where possible to bag a bargain.
“The reality is that many sellers are reluctant to reduce the price substantially as around four out of five tend to be buyers too. They will only consider price drops if they can secure a similarly good deal on their next property.
“Overall, first-time buyers in particular seem more nervous about employment prospects as the furlough support falls away. We are seeing more demand for smaller family houses where buyers are taking a longer-term view of market prospects.”
Some 81% of respondents feel there will be an increase in desire for properties with gardens or balconies.
At the same time, 74% feel there will be a shift in demand towards homes located near green spaces and 68% are of the opinion that properties with greater private and less communal space will become more desirable.
Tomer Aboody, director of property lender MT Finance, said: “Buyers are focusing on outside space and parks, which will in turn provide a resurgence in interest in the home counties as buyers feel they can get more bang for their buck the further out of the city centre they are prepared to go. This will also give them more indoors space to work from home in future, and perhaps make a second lockdown easier to deal with.
“Whereas this would be a natural human reaction to the current situation, there will still be those buyers who would rather be close to central London and avoid the commute in, which has always been an issue due to overcrowded trains. This could push up prices of London homes with gardens or other outside space.
“We are seeing some confidence among buyers. With very little stock on the market in the short term at least, transactions are completing.”
This post has originally been featured in Property Wire.