The continuing increase in would-be buyers eased off to the lowest point in almost a year during February, as the initial clamour from those previously shut out of the property market started to relent, says the RICS February Residential Market Survey.
Last month, buyer numbers increased at their slowest rate since March 2013 as the initial surge in demand, driven by the more accessible housing market, started to slowly level off. Significantly, this was seen across most areas of the country with only Yorkshire and Humberside seeing anything by way of meaningful increases in buyer growth, and that followed a flat January in the region.
Perhaps unsurprisingly, activity was particularly limited in the likes of the South West where flooding and adverse weather conditions appear to have significantly hit both the supply of properties coming up for sale and buyer demand. It remains to be seen what impact the floods will have on local and regional markets over the coming months.
Once more, the amount of homes coming up for sale failed to pick up and, although buyer demand is gradually starting to slacken, supply is still falling well short of required levels.
Moving on to prices, the cost of a home in the UK continued to rise during February, albeit at a slightly slower pace than in previous months. Last month 45% more chartered surveyors saw prices rise rather than fall. The cost of a home has now risen across the country for eleven consecutive months.
Looking ahead, respondents predict both prices and transaction levels to continue to increase as we enter the summer months where the market traditionally starts to pick up.
Simon Rubinsohn, RICS chief economist, said: “The growth in buyer numbers that we’ve seen for some months started to slow down in February, as the surge in interest sparked towards the end of last summer began to level off.
“While this certainly doesn’t mean an end to the increasing activity we’ve been seeing recently, it does suggest that the pent up demand generated throughout the downturn is gradually exhausting itself. One other factor influencing behaviour over the past month may be the weather as rain, wind and, in particular, floods tend to mean fewer people are willing to actually get out there and view houses.
“The ongoing issue that we are facing, however, is the lack of homes coming onto the market. Yes, it is true that more and more are being built, but supply is simply not enough properties to satisfy demand. As a result, prices are likely to continue to move higher making it ever harder for people to take an initial step foot onto the property ladder.”
