RICS: Lack of supply continues to fuel house price growth

Mortgage Introducer

November 11, 2021

price mortgage growth

A lack of available housing stock is continuing to push up house prices across the UK, the latest Royal Institution of Chartered Surveyors (RICS) Residential Market Survey has found. 

Some 70% of those surveyed said they had seen a rise in property prices, with the trend expected to continue over the next three months.

The survey found that estate agents have an average of 37 properties on their books which is approaching historic low levels. This comes at a time when the same agents are reporting a 10% increase in inquiries.

Simon Rubinsohn, RICS chief economist, said: “The inventory on agents’ books appears to have slipped back towards historic lows and this seems to be underpinning both the current price trend and expectations for the next year.

“Meanwhile, although there is likely to be some drop in activity in the immediate aftermath of the expiry of the stamp duty break, most activity indicators currently remain solid.

“Indeed, the main challenge for buyers looking forward may once again be a lack of choice of property on the market.”

October’s survey saw the addition of a number of extra questions to assess consumers’ willingness to reduce their home’s carbon emissions, and its impact on the market.

A third of surveyors said they had seen an increase in demand for energy-efficient homes, however, cost was the main barrier for those looking to make improvements.

More than three-quarters said they had seen little to no impact of having an energy efficient property on sale prices, however, 62% of respondents anticipated that demand would improve over the coming three years.

Tomer Aboody, director of property lender MT Finance, said: “Green issues are firmly on the agenda, with government incentives towards energy-efficient housing and growing public interest in energy efficiency and measures to reduce climate change.

“Homeowners are increasingly aware that they need to do more to help this agenda but the cost of doing so is still high and beyond the means of many.

“Not all options are viable either, with air source heat pumps, for example, requiring huge boxes to be placed on outside walls, which many homes don’t have space for. There are also potential noise issues associated with these pumps and less-efficient heating than you might expect from a traditional boiler.

“Until education improves, and pricing reduces as more specialist installers are trained, we are unlikely to see a limited uptake in alternative heat sources. That said, there are simple ways of making homes more energy-efficient, which aren’t as costly and are more feasible, including better insulation of walls, ceilings, lofts and windows.”

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