08 May Lack of supply and weak demand holding back the UK property market says RICS
The property market in the UK is constrained and marred by weak supply and high demand, according to the latest residential survey report from the Royal Institution of Chartered Surveyors (RICS). The average number of homes sold per chartered surveyor hit its highest level since February 2008 but new housing supply has declined for the fourth month in a row, the report reveals.
But despite the lack of new property coming onto the market in April, some 26% more chartered surveyors reported increased agreed sales.
Respondents across nine UK regions reported declines in new property for sale coming onto the market and with new lending regulations now in place respondents reported that the average ‘perceived’ Loan to Value (LTV) ratios among first time buyers climbed to 86%.
However, potential new buyer demand remained firm with 20% more chartered surveyors reporting an increase in new enquiries.
The report says that significantly, there does now appear not just a broadening out in the recovery away from London, but also increasingly upbeat responses on the likely price trend going forward.
In the North West, 62% more chartered surveyors predict prices over the next three months will rise, rather than fall, and in East Anglia the figure is 57%. By comparison in London, 49% more respondents conveyed similar expectations, down from 61% in March.
In the rental sector, there continues to be modest growth in tenant demand although greater mortgage availability and the Help to Buy Scheme have seen the appetite to rent lose some momentum in recent quarters,’ the report points out.
‘Even so, the shortage of property also continues to be felt in this area, with new landlord instructions broadly flat and rent prices over the next 12 months expected to increase by around 2%,’ it adds.