The latest RICS UK Residential Market Survey has revealed that house sales and buyer enquiries flatlined in March, while the number of properties coming onto the market fell for the second consecutive month, pushing prices rapidly upwards.
The survey found that in most parts of the UK, the supply versus demand imbalance led to 21% more surveyors reporting a rise in house prices in March (up from 15% in February) and 15% more surveyors expecting prices to increase over the next three months compared with 10% in February (albeit the results for both are significantly lower than in March 2014).
On a national level, Northern Ireland continues to outperform the rest of the UK with the strongest house price growth in March and the highest price expectations over the next three months. However, across much of the rest of the UK, particularly in Wales and Scotland, price gains over the next three months are expected to be much more moderate.
In London, a lack of prospective buyers saw enquiries and the number of agreed sales both fall for the 11th consecutive month and 24% more surveyors reported a decline in the number of new properties coming onto the market for sale.
However, compared to the start of the year when 42% more surveyors reported a decrease in prices, just 13% more surveyors saw prices fall in March and across the whole of the UK, the average surveyor sold 19.5 properties – reflecting activity since Autumn- although it remains some way down on where it was in the early part of 2014, RICS said.
Simon Rubinsohn, RICS’ chief economist, said: “The boost that was given to the housing market by the Help to Buy scheme has begun to dissipate and activity levels have slipped back.
“Even more worrying are the tentative signs that price momentum could be set to pick up once again as the supply of stock to the market continues to fall. Anecdotal evidence does suggest that election uncertainty may be having some impact on the market, but underlying the trends visible in the latest survey is a very real housing crisis which will urgently need to be addressed by the next government.
“It is significant that price expectations nationally are accelerating both at the three and twelve month time horizons and at the latter they are at their highest level since the spring of last year.”
Jeremy Blackburn, RICS’ head of policy, added: “The Conservative Party’s proposal this week to extend Right To Buy will help relatively small numbers of tenants to move into home ownership, without doing anything to solve the shortage in overall housing supply.
“Aspirational home ownership is at the core of our economy but we must ensure that we have a future stock across all tenures and particularly for those on lower incomes.
“The proposed brownfield fund is a welcome means to unlocking land supply for more houses to be built in the next Parliament however, it still falls short of a comprehensive housing strategy.”