May saw an increase in the number of people selling their home, but other measures of housing market activity remained flat.
The number of homes put up for sale increased for the first time in more than two years in May - but buyers continued to stay away from the market.
Estate agents reported a small increase in sales instructions last month, the first rise for 27 months, according to the Royal Institution of Chartered Surveyors (RICS).
But other measures of market activity remained subdued, with demand from potential buyers continuing to fall, albeit at a slightly slower rate than at the beginning of the year.
The number of sales agreed also remained flat, while the level of properties on estate agents’ books continued to be close to record lows, despite the rise in instructions.
Simon Rubinsohn, RICS chief economist, said: “Against this backdrop, it is likely that the headline picture regarding activity in the housing market will remain subdued for some months to come.”
Why is this happening?
The housing market has been stuck in a stalemate of low levels of supply and muted demand for around two years.
It is too early to say if the increase in sales instructions reported in May is a one-off or the start of a new trend.
RICS pointed out that the number of property appraisals agents had been asked to carry out was around 18% lower than in the same period last year, which does not bode well for future supply.
Until more homes are put up for sale, the property market will continue to suffer from subdued transaction volumes.
Above: three-bedroom home for sale in Benson, Oxfordshire
Who does it affect?
While the headline figures pointed to a flat market, RICS was at pains to stress there was significant regional variation.
Demand from potential buyers increased in six of the 12 regions of the UK during the month, while sales rose firmly in the West Midlands, the East Midlands, Scotland and Northern Ireland.
House price falls were reported in London, the south east and the south west, but property values continued to rise in the Midlands, north west, Wales, Northern Ireland and Scotland.
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What’s the background?
While RICS provides a snapshot of the current dynamics in the property market, the Land Registry also released figures based on sales data for April.
These showed that the average cost of a UK home jumped by 1.2% in April to stand at £226,906.
But the annual rate at which house prices are growing eased to 3.9%, the lowest level since March 2017.
Homes in the north east saw the biggest monthly increase at 4.2%, followed by Scotland at 2.5% and London at 2.4%.
At the other end of the scale, property values fell by 0.8% in the east of England, while they were static in the north west and edged ahead by only 0.3% in Northern Ireland.
Top 3 takeaways
- The number of homes put up for sale increased for the first time in more than two years in May
- But demand from potential buyers continued to fall
- The number of sales agreed also remained flat, while the level of properties on estate agents’ books continued to be close to record lows