Last month, new buyer enquiries rose to their highest level since 2010 with 25% more chartered surveyors reporting demand for property rose rather than fell.
TICS said that 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%.
As a result of there not being 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 rose rather than fell 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.
However, despite the improving picture for mortgage lending, many are still relying on the private rented sector, with demand for rented property 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.
‘It is encouraging to see government initiatives are having an impact on the property market. Help to Buy in combination with the Funding for Lending scheme appears to be giving the market a shot in the arm. Thankfully, sales are expected to pick up over the coming months, albeit from historically low levels,’ said Peter Bolton King, RICS Global Residential Director.
‘However there are some understandable concerns that the measures will also lead to higher prices. In view of this, it is critical that developers are as good as their word and speed up the delivery of new stock,’ he added.
The report also shows that the forward looking indicators for sales and prices recorded more positive readings at both the three and 12 months horizons. The net balance for price expectations 12 months out jumped from 26 to 34 and arguably even more importantly, the results are now positive in every part of the country with the notable exception of Northern Ireland.
This is also reflected in the results of a number of new series that we are tracking. Surveyors responding to the survey suggest that, on average prices are likely to rise by just over 1% over the next 12 months. This compares with expectations of just 0.1% back in December. Predictably, London surveyors are most positive in their expectations.
The new RICS Residential Market Survey also contains monthly updates on the lettings sector, supplementing the quarterly data. The latest readings show that tenant demand remains robust and that it is continuing to outstrip new landlord instructions.
The result is that the rental expectations series remains in positive territory with the net balance in the three months to April at 18 compared with 21 in the quarter to January. Despite the positive reading, respondents to the survey anticipate rents rising by less than 2% over the next year.
