RICS says that the number of homes coming on to the market fell again and this means there is not enough supply to cope with rapidly rising buyer demand.
The survey shows that 59% more chartered surveyors across the country predict prices twill continue their upward trend rather than fall back over the coming three months. This is the highest reading since September 1999 and demonstrates the impact that the recovery in demand allied with anaemic supply is having on the housing market.
Meanwhile, last month saw prices pick up sharply as a net balance of 58% more respondents reported price growth from 57 in October. RICS says it is significant that each region of the UK saw prices rise for the second successive month.
While there are still some areas of the UK that are struggling, it appears that, on the whole, the regional markets are now responding to the incentives provided by the government and better economic news.
Although a lack of stock on the market remains a big challenge, the number of property transactions is continuing to rise. During the three months to November, the average number of homes sold per chartered surveyor hit 20.6. This represents a significant improvement on the same period last year where respondents were selling only 15.9.
Looking ahead, with the economic recovery gaining some traction right across the UK, predictions for the rate of increase in future transaction levels hit a record level. A net balance of 76% of surveyors expect sales levels to increase as we head into the New Year.
‘It’s no secret that the housing market is on the way up and prices are surging ahead in many parts of the country. The Bank of England’s recent decision to withdraw the Funding for Lending scheme, which allows banks to borrow more cheaply and pass the benefits on to mortgage applicants, could well have some impact on the number of people able to purchase a home. Although the improvement in wholesale and retail funding markets may mean the impact on mortgages is relatively limited,’ said Simon Rubinsohn, RICS chief economist.
‘One thing we are very concerned about, however, is the lack of both new and existing homes coming on to the market. As the Chancellor pointed out last week, house building is on the up, but it is rising nowhere near quickly enough to make up the shortfall that has built up in recent years. If there is not meaningful increase in new homes, the likelihood is that prices, and for that matter rents, will continue to push upwards making the cost of shelter ever more unaffordable,’ he added.
In Scotland some 52% more chartered surveyors across the country predict prices to continue their upward trend rather than fall back over the coming three months. November saw prices remain steady, with a net balance of 42% more respondents reporting price growth in Scotland.
‘We are still very concerned about the lack of both new and existing homes coming on to the market. This issue is one of many which the Scottish Housing Commission, launched by RICS Scotland earlier this year, will seek to address and we will publish our report findings in early 2014,’ said Sarah Speirs, director of RICS Scotland.
Looking ahead, with the economic recovery gaining traction across Scotland, predictions for the rate of increase in future transaction levels hit a record level. A net balance of 78% of surveyors expect sales levels to increase as we head into the New Year, assisted, in part, by the Scottish government’s Help to Buy scheme.
‘The recent Help to Buy announcements have continued to boost buyer confidence in the Scottish housing market, with sales volumes up significantly across both our established homes and new build developments,’ said Rory Ballantyne of Ballantynes in Edinburgh.
Northern Ireland house prices have been rising for half a year and November was the sixth consecutive month in which the survey reported a positive price balance.
A net balance of 23% of respondents to the survey said that prices were up in the three months to the end of November with 31% saying that they were higher in the period, 60% saying that they were the same and 9% saying that they were down.
This follows positive data in the June, July, August, September and October surveys, the first time since the property price peak that there has been six months in a row of a price balance above zero.
However, Tom McClellan, RICS Northern Ireland housing spokesman, said it must be remembered that average prices are now more than 50% below peak levels and they are rising from these level last seen in 2004 at modest rates. ‘The pattern across Northern Ireland is also varied, with different regions experiencing different trends. In terms of transactions, it is encouraging to note that these continue to rise, as housing market activity is an important economic driver,’ he explained.
Andy Frankish, new homes director at the Mortgage Advice Bureau (MAB), said that given that house prices are rising from a low, post recession base, it’s encouraging to see the market responding to increased demand from a newly confident generation of buyers.
'Added stimulus from government schemes such as Help to Buy have helped to revitalise consumer interest and chip away at homeowning barriers. It is only natural that more enthusiasm for buying property means sellers can seek a higher price when selling their home,' he pointed lout.
'As demand grows, it’s vital the housing supply catches up, but we should be realistic and not expect things to improve overnight. Active steps promised by the government to unblock housing developments across the country and co-operation from the construction industry will help provide more affordable housing and better serve a wider range of needs. Confidence among construction companies is at its highest since the recession, and every positive sign of market growth is an added incentive for them to act quickly to boost the supply of new homes,' he added.
