Surveyors predict a slow start to 2017 for housing market
Stagnating supply is set to slow growth in the housing market in 2017, according to the Royal Institution of Chartered Surveyors.
The prediction comes despite a small increase in new buyer enquiries for the third month in a row, something RICS expects to continue in the coming months.
But while enquiries increased in most parts of the UK in November, this has been eroding available stock for sale and supply remains flat. There has been no increase in supply for nine consecutive months.
RICS chief economist Simon Rubinsohn said a key issue for the housing market is the slowdown in transaction activity since the Spring.
He explained: “Although there are some signs that the numbers may begin to edge upwards in the New Year, the combination of macro-uncertainty, the ongoing supply shortfall, with stock levels around historic lows, and the myriad of tax changes impacting on buyers suggest that any pick-up in activity will be relatively modest,” he said.
“This is significant, not just for the housing market itself, but also for the wider economy, given how much of consumer spending is tied in with home purchases.”
Stephen Smith, director of Legal & General Housing Partnerships, was more upbeat. “In spite of all the political upheavals that this year has experienced, the fundamentals of the UK economy and demand for housing continue to go from strength to strength,” he said.
“Although surveyors are expecting a slow start to 2017 due to a lack of housing supply, this is not a surprise and it will take time for the recent housing announcements from the Autumn Statement to kick in.”