MARCH 18, 2015 | BY A & S Property
‘Prices rising again due to supply shortage’ - RICS
An upward shift in house prices is being driven by a decline in the number of properties coming on to the housing market, according to the latest Royal Institution of Chartered Surveyors (RICS) UK Residential Market Survey.
RICS surveyors’ data shows that new instructions have now fallen in six of the last seven months, with many surveyors reporting declines in new supply during February.
London was the only place in the UK where more surveyors reported price declines than increases last month, as the Institution reports price rises re-emerging across the rest of the UK due to a supply demand imbalance.
Nationally Northern Ireland and Scotland continue to outperform the rest of the UK, although there were upward shifts in price growth recorded across the South West and the South East of England.
Despite reports during the past six months of the ‘election effect’ – political uncertainty which leads to a slowing property market – RICS’ surveyors forecast steady house price growth of 2.4% over the next twelve months, up from 1.8% in January.
As supply dips, the national picture of demand appears to be stabilising after seven consecutive months in which the headline reading for new buyer enquiries was negative, the data suggests.
Commenting on the latest figures, Simon Rubinsohn, RICS Chief Economist, said: “It is encouraging that that the negative trend in buyer enquiries appears to be dissipating, perhaps in part because of growing confidence that the cost of borrowing will stay lower for longer, but more worrying that instructions to sell property continue to drop.”
“This very modest reversal in the demand picture is already being felt in the key measures of price expectations highlighting the extent of the challenge policy makers will face in addressing the housing crisis in the aftermath of the coming general election.”
“Even in London, where the key RICS indicators remain in negative territory, there is a strong view in the survey that property will become even more unaffordable over the medium term. Respondents suggest, on average, that house prices will rise by a further 30 percent in the capital over the next five years,” he added.