RICS UK Residential Market Survey Findings


Category: Economy & estate planning & Uncategorized

Last month, new buyer enquiries rose to their highest level in over three years, with 25% more chartered surveyors reporting demand for property rising rather than falling. The latest jump in enquiries (from 13% more in March) strongly suggests that along with the existing Funding for Lending scheme, Help to Buy is attracting interest even if the mortgage guarantee element of the product is not due to come into effect until next year.

As demand increased, so did supply, with new instructions to sell rising in April, albeit more modestly (to a net balance of 8%). With not enough housing to meet increased demand, prices are finally beginning to improve, and the survey recorded its first positive reading for house prices since June 2010.

Newly agreed sales improved too, with 19% more surveyors reporting sales rising rather than falling during April (from 11% more in March). Meanwhile, average sales per surveyor over the past three months were at 17.1. The past two months readings on sales are at their highest levels for three years.

Despite the improving picture for mortgage lending, many are still relying on the private rented sector, with evidence that the demand for rented property is continuing to outstrip supply. The result is that 18% more surveyors expect rental prices to rise rather than fall. That said, respondents to the survey anticipate rents rising by less than 2% over the next year. This plateau may be in part due to a healthier housing market and increased access to mortgage lending.

The rise in property sales from a historically low level is welcomed by the RICS, however there is also concern expressed that this could lead to higher prices, unless developers speed up the delivery of new housing stock to satisfy the demand.

There is a concern that price increases within the housing market, much greater than UK inflation and earnings growth rates, will stimulate housing prices beyond a recovery from nil growth or negative equity levels. Returning profit driven hyper-inflation in the housing market could counteract any initiative to increase the number of house owners in the UK, as house moves up the house ownership ladder become less affordable. Would we all welcome a return to high profits on investments through house ownership and sales?

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