No easing in supply constraint

 

RICS Market Survey

RICS have just released their Residential Market Survey for October 2015.

Key facts are as follows:

– Price balance points to higher prices across all parts of the UK for a third consecutive month

– New sales instructions extend streak of uninterrupted decline stretching back to February

– Sales growth pauses but expectations remain a little more positive

Demand outpaces the supply

The Residential Market Survey shows price momentum remains firm. Although buyer demand grew at a more moderate pace during October.  However, due to the ongoing shortage of new instructions coming to market, demand continues to outpace supply across most parts of the UK. In fact, the supply of new instructions coming to the market decreased for the ninth month in succession.

Price Pressures build

The continuing demand supply imbalance is causing price pressures to build across all areas, with respondents in all parts of the country reporting rising prices for the third consecutive month.

Looking ahead, respondents in all parts of the UK expect prices to continue rising at both the three and twelve month time horizons.

Looking forward, contributors appear more confident about the outlook for transactions levels with a net balance of 31% expecting activity to rise over the coming three months, up
from 26% the previous month. Meanwhile, at the twelve month horizon, respondents across the UK see sales activity rising, with respondents in Northern Ireland particularly confident in the outlook for the year to come.

The Lettings Market

In the lettings market, tenant demand continued to outpace supply across all areas in the three months to October (on a seasonally adjusted basis). At a national level, this has

been an ongoing trend for some time, with growth in demand persistently outstripping that of supply since 2009. Given this, rental expectations remain strong and respondents continue to expect rents to rise firmly over the year ahead. Further out, rental growth is anticipated to accelerate to an average of just under 5% per year over the coming five years.

 

 

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