House prices high despite falling supply

Simon Rubinsohn
Simon Rubinsohn
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House prices in the North West were among the highest in the UK in May, despite the number of homes per UK surveyor falling to a record low since the data series began in January 1978.

That is according to the latest RICS (Royal Institution of Chartered Surveyors) UK Residential Market Survey.

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.

Simon Rubinsohn

While 61 per cent more surveyors in the region saw prices rise in May (the same month in which the Nationwide Building Society estimated that the average price of a home in the UK has now climbed to £195,000), supply to the market declined.

Fifty seven per cent more North West surveyors reported a drop in new instructions.

Despite the growing supply constraints, there was an increase in new buyer enquiries– 16 per cent more surveyors reported an increase in enquiries, compared to 10 per cent in April) and 53 per cent more surveyors in the North West expect prices to rise further over the next three months.

John Williams, FRICS, of estate agents, Brennan Ayre O’Neill, said: “Post-election certainty has supported enquiry levels but a lack of new stock could hold back the market.”

Richard Powell, FRICS of Ryder & Dutton commented: “Surprisingly the election seemed to have very little effect on the property market in our local areas and demand remained the same during the election period.”

Surveyors expect house prices in the region to increase over the next three months.

Meanwhile, in the lettings market, demand for rental properties in the North West decreased slightly.

Thirty three per cent more surveyors in the region reported a rise in tenant demand, compared to 50 per cent back in April.

Simon Rubinsohn, RICS Chief Economist, 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 are continuing to rise – with the reality meaning that properties are not becoming any more affordable any time soon.”