12 Nov UK property prices up as demand surges says latest RICS report
Soaring demand in the UK is pushing house prices higher with the market seeing interest from would be buyers rocketing, according to the latest report from the Royal Institution of Chartered Surveyors (RICS). House prices jumped once again in October as demand dwarfed the amount of properties coming onto the market, says October’s RICS Residential Market Survey.
The proportion of chartered surveyors reporting price rises hit an 11 year high, as the net balance of respondents reporting rises jumped to 57%. This is the highest reading since June 2002 and RICS said that it demonstrates the impact that the imbalance between supply and demand is having on the market.
Surveyors across the country noted that while Help to Buy is boosting buyer numbers, a lack of new instructions from vendors is proving problematic.
Meanwhile, with Help to Buy widening the net of those now in a position to purchase their own home and the loan to value rates on offer to buyers continuing to creep upwards, demand for rented accommodation is rising more modestly than previously. A net balance of only 11% of respondents reported rises in interest from potential tenants during October, the lowest reading in over 10 years.
With the market continuing to grow across the UK, the number of homes sold also saw a big jump last month. In the three months to October, chartered surveyors sold an average of 20.3 homes, the highest amount since February 2008.
RICS points out that it is significant that almost every region of the country saw transaction levels increase which further demonstrates that the recovery is spreading beyond the traditional economic powerhouse of London and the South East.
Looking ahead, respondents are optimistic that the currently flourishing market is set to continue, with expectations for both future prices and future transaction numbers predicted to increase over the coming three months.
‘It’s no secret the housing market is gathering some momentum and that buyer numbers are on the rise right across the country. A greater willingness by lenders to increase loan to values on mortgage products allied to the Help to Buy scheme has meant that more and more first time buyers are in a position to enter the market,’ said Simon Rubinsohn, RICS chief economist.
‘In spite of this, the amount of homes currently up for sale is still nowhere near enough to keep up with demand and in order for the market to function correctly so this imbalance urgently needs to be addressed,’ he explained.
‘House building starts have picked up recently but we are still well behind in terms of the amount of properties needed. If we are to create a more sustainable market, it is critical that many more good quality homes are built in areas where people want to live,’ he added.