A lack of new properties being listed for sale continues to drive house prices up, while most new buyers don’t factor in energy efficiency in their purchase, this according to the October 2021 RICS UK Residential Market Survey.
In October, respondents to the monthly survey pointed to another dip in the volume of sales agreed over the month, (net balance -9%) with the main issue being a lack of stock for would-be buyers to choose from.
Despite a rise in the number of new enquiries (net balance +10%), agents currently only have 37 properties on their books on average. Meanwhile, -20% of contributors have reported a fall in the number of new properties being listed for sale.
This is not only impacting on sales activity but is a significant factor behind current house price rises. In October, +70% of respondents (net balance) cited a rise in house prices, with the trend expected to continue over the next three months (net balance of +25%) and year ahead (net balance of +69%).
Extra questions were added to the October survey to gauge consumers’ willingness to reduce their home’s carbon emissions and it’s impact on the market. Interestingly, whilst one-third of respondents have seen an uptick in demand for energy efficient homes, it isn’t currently impacting the property value. Over three-quarters of respondents see little to no impact of having an energy efficient property on sale prices.
Whilst 62% of respondents anticipate demand for energy efficient properties improving over the coming three years, the current barrier for many to improve enhance their property’s energy efficiency is cost (85%).
Simon Rubinsohn, RICS Chief Economist, commented: “Although the mood music around interest rates does appear to be shifting, for now the stronger influence on the housing market is the ongoing imbalance between demand and supply. The inventory on agents’ books appears to have slipped back towards historic lows and this seems to be underpinning both the current price trend and expectations for the next year. Meanwhile although there is likely to some drop in activity in the immediate aftermath of the expiry of the stamp duty break, most activity indicators currently remain solid. Indeed, the main challenge for buyers looking forward may once again be a lack of choice of property on the market.
“As long as there is a lack of choice for would-be buyers, it is clear that buyers ambition to be more climate friendly will have to move down their list of priorities. The data from today’s report suggests that additional government funding and investment alongside new financial solutions appealing to homeowners, landlords and investors could pave the way for decarbonising UK homes.”
