House prices rose slightly in May, but the Government’s decision to abolish HIPs has given supply a boost, according to the latest RICS UK Housing Market survey .
22% more chartered surveyors reported a rise than a fall in house prices up from 19% in April. Surveyors are still reporting house price rises in most parts of the country. The exceptions according to the latest survey are Northern Ireland, Wales, Yorkshire and Humberside and the West Midlands.
RICS believes government announcements are already showing signs of impacting on the market in England and Wales. Surveyors report that the decision to abolish HIPs has pushed more supply onto the market. The net balance of surveyors reporting rises in new instructions moved from 11% in April to 21% in May. This trend is likely to continue in the near term. In response to an additional question included in the survey, 73% of surveyors said that they expect the decision on HIPs to lead to higher levels of new instructions with the actual increase in supply anticipated to be around 15%. Buyer interest continued to increase, albeit at almost the same pace as in April. 10% more chartered surveyors reported a rise in new buyer enquires up from 9%.
The sales expectations net balance rose from 27% to 31%. However, the average number of completed sales fell by nearly 5% pushing the sales to stock ratio – a key indicator of future house price inflation – from 28% in April to 27% in May.
RICS spokesperson Ian Perry said: “Surveyors are generally confident that sales will continue to pick up over the summer months. The increase in supply as a result of the abolition of HIPs is helping to support this optimism despite continuing concerns about mortgage finance. A higher level of instructions should meanwhile also lead to a flatter trend in house prices in the latter part of the year.””
