Surveyors have urged the next Government to address the shortage of housing stock as a matter of urgency as they report increasing growth in house prices.
According to the latest Royal Institution of Chartered Surveyors residential market survey, the net balance of surveyors reporting a pick-up in house prices in March hit 21 per cent, up from 15 per cent in February and 8 per cent in January. The net balance is calculated by the percentage of surveyors reporting an increase minus the percentage reporting a decrease.
The net balance of surveyors expecting prices to rise over the next year reached a 10-month high of 70 per cent, with the average increase expected to be 2.5 per cent.
The supply of new homes for sale tightened again in March, with a net balance of new instructions of -9 in March, compared to -8 in February. The contraction in supply was mainly concentrated in England, with surveyors suggesting that election uncertainty may be causing vendors to hold off putting their properties on the market.
Demand was broadly flat across the UK, although Scotland and Northern Ireland were the only areas to have seen demand rise for each of the past six months.
RICS chief economist Simon Rubinsohn says: “The boost that was given to the housing market by the Help to Buy scheme has begun to dissipate and activity levels have slipped back.
“Even more worrying are the tentative signs that price momentum could be set to pick-up once again as the supply of stock to the market continues to fall. Anecdotal evidence does suggest that election uncertainty may be having some impact on the market, but underlying the trends visible in the latest survey is a very real housing crisis, which will urgently need to be addressed by the next government.”
Mortgage Advice Bureau head of lending Brian Murphy says: ”There is a severe lack of fresh properties coming onto the market, with current housebuilding levels failing to keep up with demand. If the imbalance between supply and demand is not addressed as a matter of priority, prices may be driven to levels that could see some first-time buyers with smaller deposits priced out of the housing market.”