House prices driven higher by supply shortage

Thu 14 Nov 2013

Estate agents have warned that there are nowhere near enough homes on the market to satisfy would-be buyers, with the gap between demand and supply at its widest since May 2009.

The shortage has also contributed to an 11-year record in the proportion of estate agents reporting rising house prices, according to the Royal Institution of Chartered Surveyors.

Rics said "rocketing" interest from would-be buyers was dwarfing the number of properties being put up for sale as the state-backed Help to Buy and Funding for Lending schemes stoke interest in a rejuvenated housing market.

Its latest snapshot of the residential property market found that for England and Wales, the proportion of estate agents reporting rising prices minus those reporting falls – the net balance – had jumped to 57% in October, the highest figure since June 2002.

Simon Rubinsohn, chief economist at Rics, said a greater willingness by lenders to offer mortgages with smaller deposits meant more first-time buyers were able 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," he said. "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."

Despite the discrepancy between demand and supply reaching a four-and-a-half-year peak, the number of homes being bought also saw a big jump last month. During the previous three months, each Rics participating member sold an average of 20.3 homes, the most since the start of 2008.

"Significantly, almost every region of the country saw transaction levels increase, which further demonstrates the recovery is spreading beyond the traditional economic powerhouse of London and the south-east," said Rics. But it added: "Surveyors across the country note that while Help to Buy is boosting buyer numbers, a lack of new instructions from vendors is proving problematic."

The organisation's respondents were optimistic that the "currently flourishing" market will continue, with prices expected to continue rising over the coming months. That prediction will delight those intending to sell soon, but will represent a setback for those trying to get their first foot on the property ladder.

The survey found prices were expected to rise by 3% nationally over the next 12 months – up from 2.6% last month – and by 4.5% a year for the next five years.

The Bank of England's Funding for Lending scheme, which passed its first anniversary in August, has been credited with triggering some of the record low mortgage rates on offer to certain buyers.

Source; The Guardian

January 2017


April 2014

What dreadful decor would put you off buying a house?

March 2014

10 mortgage pitfalls and how to avoid them

Rising housing market spreads beyond London and south-east

February 2014

Help is at hand!

Moving to your own place? If you're renting for the first time follow Shelter�s top tips to avoid the common pitfalls.

Investments Opportunities

OFF market and GREY market

January 2014

Home or Space Ship?

Estate Agent in East Yorkshire


Residential Investment Portfolios for sale

Growing North-South split shown in latest property-price figures

December 2013

Estate Agent in Hull, Derby and Nottingham

Sell your house for FREE

House prices could rise by 8% next year, says Rightmove

UK weather: Clean-up operation begins following worst storm in 60 years

Residential Portfolios for sale

Housing market: surveyors most upbeat in 14 years

House prices rise again as supply squeeze continues

Why Invest in Hull?

November 2013

UK house prices rising 6% a year, says Nationwide

Mortgage lending hits nearly �10bn in October

Mortgage lending at highest level since 2008

Yorkshire bypasses � and betters � Help to Buy mortgages

BakerReed Properties Limited

Property market brims with confidence

House prices driven higher by supply shortage

The Ombudsman Service

What I'm really thinking: the first-time buyer

Buy-to-let indicates market is healthy

What estate agents have to tell you � changes to the law

HS2 and the villagers trapped in homes nobody wants

October 2013

House prices rising in every region in England � Land Registry

Pension or property � what's the best plan for retirement?

More evidence of growing homeowner confidence

Guide to money laundering

UK mortgage lending at five-year high

Rents rise to 'record levels'

Equity release � the gift that keeps on taking

Cash buyers waiting

Help To Buy

Five-year mortgage fixes start to rise

Should I use Help to Buy to buy a home?

House prices hit record high during summer