Lack of properties pushes up prices
The number of properties coming onto the market continued to drop, pushing prices rapidly upwards in the South West, according to the latest RICS UK Residential Market Survey.
In most parts of the country, the supply versus demand imbalance led to a rise in house prices in March and in the South West 36% more chartered surveyors reported a rise in house prices in March (up from 31% in February) and 16% more chartered surveyors expect prices to increase over the next three months in the region compared with 6% in February (albeit the results for both are significantly lower than in March 2014).
Looking at sales expectations in the South West over the next three months, 9% more chartered surveyors expect an increase in March (compared to 28% more in February), while new buyer enquiries remain flat, and new instructions continue to fall. 4% more chartered surveyors in the South West saw a drop in new properties coming onto the market in March.
Looking at the longer term picture, the predictions for both sales and rents remain positive. The predicted increase from respondents in the South West for house prices over the next 12 months is 2.5%, and over five years it is 3.1%. Looking at rents, the predicted increase over the next 12 months is 3.0% and over five years it is 4.3%.
Nationally, Northern Ireland continues to outperform the rest of the UK with the strongest house price growth in March and the highest price expectations over the next three months. In London, a lack of prospective buyers saw enquiries and the number of agreed sales both fall for the 11th consecutive month and 24% more surveyors reported a decline in the number of new properties coming onto the market for sale.
Jeremy Blackburn, Head of Policy, said: “The Conservative Party’s proposal this week to extend Right-To-Buy will help relatively small numbers of tenants to move into home ownership, without doing anything to solve the shortage in overall housing supply. Aspirational home ownership is at the core of our economy but we must ensure that we have a future stock across all tenures and particularly for those on lower incomes. The proposed brownfield fund is a welcome means to unlocking land supply for more houses to be built in the next Parliament however, it still falls short of a comprehensive housing strategy.”
Simon Rubinsohn, RICS Chief Economist, said: “The boost that was given to the housing market by the Help to Buy scheme has begun to dissipate and activity levels have slipped back.
Even more worrying are the tentative signs that price momentum could be set to pick-up once again as the supply of stock to the market continues to fall. Anecdotal evidence does suggest that election uncertainty may be having some impact on the market, but underlying the trends visible in the latest survey is a very real housing crisis which will urgently need to be addressed by the next government.
It is significant that price expectations nationally are accelerating both at the three and twelve month time horizons and at the latter they are at their highest level since the spring of last year.”
