House prices jumped once again last month as rocketing interest from would-be buyers dwarfed the amount of properties coming onto the market, says October’s RICS Residential Market Survey.
The proportion of chartered surveyors reporting price rises hit an eleven-year high, as the net balance of respondents reporting rises jumped to 57 percent. This is the highest reading since June 2002 and demonstrates the impact that the imbalance between supply and demand is having on the market.
Surveyors across the country note that while Help to Buy is boosting buyer numbers, a lack of new instructions from vendors is proving problematic.
Meanwhile, with Help to Buy widening the net of those now in a position to purchase their own home and the loan to value rates on offer to buyers continuing to creep upwards, demand for rented accommodation is rising more modestly than previously. A net balance of only eleven percent of respondents reported rises in interest from potential tenants during October, the lowest reading in over ten years.
With the market continuing to grow across the UK, the number of homes sold also saw a big jump last month. In the three months to October, Chartered Surveyors sold an average of 20.3 homes*, the highest amount since February 2008. Significantly, almost every region of the country saw transaction levels increase which further demonstrates that the recovery is spreading beyond the traditional economic powerhouse of London and the South East.
Looking ahead, respondents are optimistic that the currently flourishing market is set to continue, with expectations for both future prices and future transaction numbers predicted to increase over the coming three months.
Simon Rubinsohn, RICS Chief Economist, commented: “It’s no secret the housing market is gathering some momentum and that buyer numbers are on the rise right across the country. A greater willingness by lenders to increase loan to values on mortgage products allied to the Help to Buy scheme has meant that more and more first time buyers are in a position to enter the market. .
“In spite of this, the amount of homes currently up for sale is still nowhere near enough to keep up with demand and – in order for the market to function correctly – this imbalance urgently needs to be addressed. Housebuilding starts have picked-up recently but we are still well behind in terms of the amount of properties needed. If we are to create a more sustainable market, it is critical that many more good quality homes are built in areas where people want to live.
