House prices in the North West were driven up again in April as supply of homes for sale across the region fell last month, according to the latest RICS UK Residential Market Survey.
While 59 per cent more surveyors in the North West saw prices rise in April – up from 40 per cent in March and 14 per cent back in February – new instructions slipped to a net balance of -23 per cent. Moreover, the flow on second hand stock onto the market dropped in most parts of the country, including the North West.
Alongside this, for the first time since August 2014, respondents reported an increase in prices in every area of the UK. The reason for this being the shift in tone in the London market, where 28 per cent more respondents saw prices in the capital rise.
Going forward, 34 per cent of surveyors in the North West expect house prices to continue to rise over the coming months.
Meanwhile, in the lettings sector, there is no slowing in the growth of tenant demand, with 59 per cent of surveyors in the region reporting an increase in demand for rental properties. This rise in demand looks like it may have an impact on rent levels as 52 per cent of North West surveyors predict that rents will steadily rise, if more modestly, over the coming three months.
Although anecdotal evidence suggests that these trends may have in part been a result of uncertainty ahead of the election, they are also reflective of deeper underlying problems. The downward trend in owner-occupation rates across the country is a visible sign that affordability constraints bite ever deeper, as does the squeeze on household budgets from higher rents.
Simon Rubinsohn, RICS chief economist, said: “It is conceivable that the decisive outcome to the election could encourage a pick-up in instructions to agents and ease some of the recent upward pressure on house prices but it is doubtful that this will be substantive enough to provide anything more than temporary relief.
“Alongside an increased flow of second hand stock, it is absolutely critical that new government focuses on measures to boost the flow of new build.’’