Housing supply drops as demand rises
Buyers are returning to the housing market after the Brexit blip, but face a lack of supply, according to the Royal Institution of Chartered Surveyors.
In its latest survey the RICS noted that homebuyer demand increased for the second consecutive month in October.
At the same time the the number of properties on the market dropped, and prices have risen at the national level, although surveyors in central London noted the eighth monthly price fall in a row.
More generally, the rise in prices has been fuelled by a continued fall in the number of new properties on the market, a trend that has continued for well over two years. Respondents reported a further slight decline in new instructions over the month, adding to the dire shortage of available housing across the UK that is continuing to push prices upwards.
The October survey also revealed that agreed sales rose marginally across the UK with 5% more chartered surveyors seeing activity rise rather than fall in October. Expectations for the months to come have also improved a rise in surveyors forecasting a boost in transaction levels across the UK as a whole.
David Cheetham, analyst at trading platform XTB.com, said of the figures: “Surveyors seeing price increases illustrates the bullish feel in the market. Many expected house prices to fall in the wake of the Brexit vote but this hasn’t really transpired and with the majority of demand in the sector coming from people who actually intend to live in the property rather than speculative investors it is hard to foresee a set of circumstances anytime soon for a significant decline.
“The longer term market direction will depend more on supply than demand and as RICS continues to highlight this remains relatively low and supportive of price. Big developers face a trade off between building more properties and restricting supply to force prices higher and for the time being they seem content to lean towards the latter.”