Following the General Election, the East Midlands housing market has seen an increase in activity, according to the December 2019 RICS Residential Market Survey.

The change in activity levels is expected to lead to house price rises in the near and longer term due to continued imbalance in supply.

In December, 13% more survey respondents saw a rise in the number of enquiries from new buyers (up from -5% in November). Alongside a rise in enquiries from buyers, the number of agreed sales also improved, (+13% net balance). This is the first time since November 2018 that the number of agreed sales has shown a positive result.

Looking ahead, to the next three months +20% of respondents in the East Midlands, anticipate sales transactions will rise. Further out a net balance of +68% of survey participants predict that sales will rise in the year ahead.

The number of new properties being listed for sale also improved in December, but to a lesser degree. A net balance of +13% of contributors reported an increase, with only East Anglia and Northern Ireland reported a continued decline.

House prices across the region, remain broadly flat but going forward, near term price expectations were revised higher than last month. Looking further ahead, +68% of respondents also expect prices to increase at the twelve-month horizon.

Ian Denton, MRICS, of Jackson-Stops & Staff in Northampton, commented: “There is no doubt the positive result of the general electon has increased activity from both purchasers and new vendors. This bodes well for 2020.”

James Abbott, MRICS, of Savills in Stamford, Lincolnshire, commented: “December saw more buyer activity than previous months, with some excellent activity after the election. There was confidence.”

In the lettings market, tenant demand (non-seasonally adjusted monthly series) picked-up modestly whilst the number of new properties being listed for rent, continued to decline. Going forward, rents are expected to increase as a consequence of the imbalance between rising demand and falling supply.

Simon Rubinsohn, RICS Chief Economist, said: “The signals from the latest RICS survey provides further evidence that the housing market is seeing some benefit from the greater clarity provided by the decisive election outcome. Whether the improvement in sentiment can be sustained remains to be seen given that there is so much work to be done over the course of this year in determining the nature of the eventual Brexit deal. However, the sales expectations indicators clearly point to the prospect of more upbeat trend in transactions emerging with potential purchasers being more comfortable in following through on initial enquiries.

“The ongoing lack of stock on the market remains a potential drag on a meaningful uplift in activity although the very modest increase in new instructions in December is an early hopeful sign. Given that affordability remains a key issue in many parts of the country, the shift in the mood-music on prices is a concern with even London expectations pointing to a reversal of course both over the coming months and looking further out. This highlights the critical importance of the government addressing the challenge around housing supply particularly with the gradual phasing out of the Help to Buy incentive.”