House prices continue to rise across the country amid a shortage of homes for sale that shows no signs of abating, according to the Royal Institution of Chartered Surveyors.
The latest RICS residential market survey for April found new buyer enquires edged up, as the limited amount of property stock continues to push up house prices despite cost of living concerns.
RICS’ survey of its members in April found a net balance of 10% reported an increase in new buyers’ inquiries rather than a fall.
Some 80% of professionals reported an increase in house prices in April, up from 74% in March.
Surveyors expect prices to continue to rise. Looking forward to the next year, 62% anticipate price increases, although this is down from 78% in the February survey.
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“Despite growing macro headwinds in the form of cost-of-living pressures and higher interest rates, the UK residential market continues to see modestly positive trends in new buyer enquiries,” Tarrant Parsons, economist at RICS, said.
“For the time being at least, even though there is a lot of caution about the future economic landscape, it seems that limited supply available on the market, coupled with steady demand growth, are still the overriding drivers of house prices. As such, there is little evidence at this stage of house price inflation losing much momentum, while expectations for the coming twelve months have only moderated slightly from recent highs.”
The number of agreed sales also remained broadly unchanged in April, having increased for the previous two months. This trend is expected to continue over the next few months.
“One lesson from the pandemic is not to expect normal service to resume overnight and so it is proving with the UK housing market," Tom Bill, head of UK residential research at Knight Frank, said.
“Demand is now robust rather than fierce as the economic uncertainties mount but supply remains stubbornly low, which is largely the result of a vicious circle that means owners are holding back from listing because they cannot find anywhere to buy themselves,” he added.
The number of available properties to rent is also edging down, as demand from renters increases.
Sarah Coles, senior personal finance analyst at Hargreaves Lansdown, said: "For renters, life is going to get even more expensive. They already spend a significantly larger chunk of their income on housing costs than their home-owning counterparts, and rising rents are going to put them under even more pressure. Against the backdrop of soaring bills, this could force more renters to downsize over the coming months.
"Landlords continue to sell up in order to capitalise on higher house prices, so there are fewer properties left for the growing number of tenants. One agent said they had around ten enquiries for every property that becomes available. It means remaining landlords can continue pushing up rents, causing even more headaches for tenants.”
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