A lack of available property is continuing to plague the market with new instructions being received by agents remaining close to historic lows at just over 45 properties, according to the latest data from the Royal Institution of Chartered Surveyors.
RICS points out that this drop in new properties coming to the market continues a pattern that extends back to the mid 2014 with a brief exception around the turn of the year when some vendors saw opportunity linked to the April hike in stamp duty for investors.
The drop in housing supply alongside an increase in buyer demand is expected to push up prices somewhat in the near term and by rather more in longer term.
RICS have already found this happening with prices creeping up in September, with 17% more chartered surveyors reporting an increase in prices than a fall, up from 13% in August.
Over the next three months, nationally, house prices are predicted to rise further with 14% respondents to the RICS survey expecting to see an increase. This is the strongest reading since March and compares with 9% in August.
Richard Sexton, director of e.surv, said: “The imbalance between supply and demand continues to put an upward pressure on house prices. Although more first-time buyers are entering the market, until more new homes are built properties will remain unaffordable to many.
“The government and the industry need to work together to address this issue if we are to see this confidence remain over the longer term.”
And his views were echoed by Randeesh Sandhu, CEO of Urban Exposure, who said: “Confidence in the housing market continues to grow with both prices and sales volumes remaining steady and future price expectations positive. However, the lack of housing supply continues to cast a cloud on the market, with stock levels continuing to fall.
“However, silver linings are beginning to appear following Sajid Javid’s recent policy announcements including the £3bn Home Builders Fund, the accelerated construction on public land and unlocking brownfield sites.
“These proposals will go some way to give housebuilders – particularly small and medium sized ones – a much needed boost and help nudge towards the target of building 250,000 homes a year.
“In addition, hopes are on the upcoming Autumn Statement, and Javid’s recent promise for a radical set of reforms, that further policy announcements will be made to support housing supply.
“Alongside this momentum, reforms to the planning system are also needed in order to deliver on housing targets. This means addressing both the length of time the process takes as well as the lack of skilled planners in local authorities.”