13 Dec Housing market: surveyors most upbeat in 14 years
The reading for the number of surveyors predicting price rises rather than falls is the highest since September 1999. Surveyors’ expectations that house prices will increase into the new year surged to their highest levels in more than 14 years in November. The Royal Institution of Chartered Surveyors (Rics) said that a balance of 59% more surveyors predict rises will increase rather than edge down over the next three months as the number of homes for would-be buyers to choose from continued to fall “well short” of demand.
Meanwhile, the proportion of surveyors predicting sales will pick up heading into 2014 reached a record level, with a net balance of 76% more surveyors expecting sales to increase, marking the highest reading in records going back to 1998.
Rics warned that without a “meaningful increase” in the supply of homes, both house prices and rents will become more unaffordable.
It said the reading for the number of surveyors predicting price rises rather than falls is the highest since September 1999 and demonstrates the impact that the recovery is having on an “anaemic supply” of properties for sale.
In what Rics said is a “sharp” pick-up, a balance of 58% more surveyors also reported already seeing house price growth last month. For the second month in a row, each region of the UK saw prices rise.
House sales have also lifted strongly compared with a year ago. An average of just over 20 homes per surveyor were sold in the three months to November, compared with around 15 during the same period last year.
The housing market has been showing strong signs of recovery throughout 2013 following a string of government schemes such as Help to Buy and Funding for Lending which have widened mortgage availability and fuelled demand from buyers.
A new phase of the government’s flagship Help to Buy scheme was launched in October to give more people with low deposits a helping hand on to or up the housing ladder. The scheme offers state-backed loans to people with deposits as low as 5% and lenders representing around two-thirds of the mortgage market have confirmed they will take part.
But experts have said that stronger efforts must also be made to increase the number of homes on the market, with the mismatch between supply and demand putting upward pressure on prices.
Last week, Halifax reported that house prices rose by 7.7% in November, the highest increase in six years.
In his autumn statement last week, chancellor George Osborne announced £1bn of loans to unblock large housing developments, including in Manchester and Leeds, and raised a borrowing limit for councils to fund new homes. But the housing charity Shelter called for “bolder ideas” for more affordable homes to be built.
Simon Rubinsohn, Rics chief economist, said: “It’s no secret that the housing market is on the way up and prices are surging ahead in many parts of the country.
“As the chancellor pointed out last week, housebuilding is on the up, but it is rising nowhere near quickly enough to make up the shortfall that has built up in recent years.
“If there is not a meaningful increase in new homes, the likelihood is that prices, and for that matter rents, will continue to push upwards, making the cost of shelter ever more unaffordable.”
The Funding for Lending scheme, which has been credited with boosting mortgage availability generally, is being redirected away from households to help small businesses.
The number of mortgages on the market has increased by around 40% since Funding for Lending was launched last year.
Osborne also announced last week that non-UK residents will have to pay capital gains tax on property sales from April 2015.
This is expected to take some of the heat out of the London housing market, where strong house price growth has been put down in part to overseas investors looking for a safe haven for their cash.