RICS November 2013 UK Residential Market Survey
Expectations for future house price growth hit a more than fourteen-year high during November as the amount of homes coming onto the nation's market, once again, fell well short of rapidly rising buyer demand.
59 percent more chartered surveyors across the country predict prices to continue their upward trend rather than fall back over the coming three months. This is the highest reading since September 1999 and demonstrates the impact that the recovery in demand allied with anaemic supply is having on the housing market.
Meanwhile, last month saw prices pick up sharply as a net balance of 58 percent more respondents reported price growth (from +57 in October). Significantly, each region of the United Kingdom saw prices rise for the second successive month. While there are still some areas of the UK that are struggling, it appears that, on the whole, the regional markets are now responding to the incentives provided by the government and better economic news.
Although a lack of stock on the market remains a big challenge, the number of property transactions is continuing to rise. During the three months to November, the average number of homes sold per chartered surveyor** hit 20.6. This represents a significant improvement on the same period last year where respondents were selling only 15.9.
Looking ahead, with the economic recovery gaining some traction right across the UK, predictions for the rate of increase in future transaction levels hit a record level.*** A net balance of 76 percent of surveyors expect sales levels to increase as we head into the New Year.
Simon Rubinsohn, RICS Chief Economist, commented:
"It's no secret that the housing market is on the way up and prices are surging ahead in many parts of the country. The Bank of England's recent decision to withdraw the Funding for Lending scheme – which allows banks to borrow more cheaply and pass the benefits on to mortgage applicants – could well have some impact on the number of people able to purchase a home. Although the improvement in wholesale and retail funding markets may mean the impact on mortgages is relatively limited.
"One thing we are very concerned about, however, is the lack of both new and existing homes coming on to the market. As the Chancellor pointed out last week, housebuilding is on the up, but it is rising nowhere near quickly enough to make up the shortfall that has built up in recent years. If there is not meaningful increase in new homes, the likelihood is that prices, and for that matter rents, will continue to push upwards making the cost of shelter ever more unaffordable."
** Sales per surveyor recorded per branch (three month rolling average)
*** Sales expectations series dates back to October 1998