Homes For Sale Supply At Record Low

Homes For Sale Supply At Record Low
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The supply of homes for sale has plunged to its lowest levels since records started in 1978, the Royal Institution of Chartered Surveyors (Rics) has reported.

Hopes for a post-general election bounce in properties coming for market appear to have been misplaced, with the average stock of properties per surveyor falling to just under 52 in May, marking the lowest figure Rics has recorded since it started collecting the data in January 1978.

The "acute shortage of supply" of homes for sale is continuing to push house prices higher - and feedback from the survey suggests values are expected to increase by another 25% over the next five years, the report said.

New property listings have been declining for four months in a row and have failed to show any meaningful growth since the end of 2013, Rics said.

On a regional basis, London and the North West of England have seen the sharpest contractions in the supply of homes for sale, while Scotland was the only area of the UK to have seen an increase in the supply of properties.

Rics said some surveyors had "expressed surprise" at the lack of a fresh supply of new properties coming onto the market after the general election. It had been thought that some potential sellers could be waiting for the outcome before putting their home on the market.

Surveyors in the North West of England, Northern Ireland, East Anglia and the South West reported the strongest price growth over the last three months.

Alongside this, Rics said that London house prices, which had been cooling after a particularly heated period last year, are also seeing a turnaround, with surveyors in the capital reporting prices there increasing for two months in a row, following seven months of falling prices.

Meanwhile, 10 out of 12 areas covered in the survey showed a pick-up in enquiries from buyers, although buyer interest was reported to be broadly unchanged in Wales and the South East of England.

Across the survey, a net balance of 18% of surveyors reported new buyer enquiries increasing rather than decreasing in May.

Simon Rubinsohn, chief economist at Rics, said: "There had been some hope that the removal of political uncertainty would encourage more properties onto the market but the initial indications are that this is not proving to be the case.

"As a result, it is hardly surprising that prices across much of the country are continuing to be squeezed higher with property set to become ever more unaffordable.

"Indeed the feedback we are getting in the survey, which points to prices at a headline rising by another 25% over the next five years, suggests that there is no real confidence that the measures necessary to deliver a meaningful boost to new supply will be put in place any time soon.

He continued: "Significantly, away from the South East, the strongest price growth is anticipated in the North West, which is envisaged to benefit economically from the focus of the Government on developing the 'northern powerhouse' centred on this area."

Several parts of the UK are seeing a solid growth in agreed sales, most notably in Northern Ireland, the South West of England and Yorkshire and the Humber.

Meanwhile, sales were found to be dwindling in London and the North West of England, which could be partly due to the lack of suitable properties on the market in these areas, the report said.