RICS have just released their September 2015 market survey.
- Agreed sales rise at the fastest rate since May 2014
- Prices increase further across all parts of the UK
- New buyer demand continues to outweigh fresh instructions to sell
Lack of New Sales Instructions
Despite the fact that sales growth has gained significant momentum over the month, lack of new sales instructions and limited stock are seen as substantial restraints. The September 2015 Residential Market Survey results indicate that this may dampen transaction growth in the future. Although they report that demand is strengthening.
At the headline level, agreed sales picked up notably with the latest data suggesting transactions rose at the quickest pace since May 2014.
The stronger sales performance has come on the back of the sustained upturn in demand seen since April. Indeed, new buyer enquiries improved for a sixth successive month
although the rate of increase did moderate a touch in the latest results.
The good news is that almost all parts of the UK are seeing rising demand with the pick up particularly strong in the West Midlands, the North and Wales. The firm demand picture
chimes with recent lending data reported by the Bank of England - which showed mortgage approvals at an eighteen month high and up 12% compared to a year ago.
New instructions to sell dropped back yet again, meaning the number of new listings has now fallen in thirteen of the previous fourteen.
40% of respondents to the RICS survey feel the biggest factor behind this ongoing shortage is the lack of stock for sale deterring would be movers. The next most cited influence was economic uncertainty, with 12% stating this was holding back supply, while 11% believed stretched affordability was the issue.
As a result of the persistent supply demand imbalance, national house prices continue to rise at a significant pace. Moreover, all parts of the UK were reported to have seen
some degree of growth for the second straight month.
Despite the prolonged period of rising values, 68% of respondents in total still consider prices to be at or below fair value (unchanged over the past two months). Again, London
is an exception to this trend with 59% sensing residential property to be somewhat overpriced, while 28% feel the capital is very expensive (up from 20% last time).
In the lettings market, tenant demand increased smartly once more, thereby extending a run of uninterrupted growth stretching back to December 2014.
Over the next twelve months, members are forecasting rents to rise by around 3% at the headline level. The strongest projections continue to come from the West Midlands where rents are anticipated to increase by a little over 4% (three month moving average).