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Demand Sends Up Prices As Buyers Rejoin Property Market

A new survey by the Royal Institution of Chartered Surveyors indicates that homebuyer demand has increased for the first time in six months as a scarcity of available properties drives prices up.

In September 8% more estate agents reported increased buyer queries, compared to June, when decreased demand was recorded by 34% of surveyors. The September rise is the first time that overall interest has picked up.

The Royal Institution of Chartered Surveyors (RICS) regarded the rejuvenated interest as a sign that the market was evening out after the decrease attributed to Brexit worries and the higher stamp duty.  However, the number of available properties has decreased for the seventh month in a row, creating an imbalance that drives the prices higher.

RICS representatives stated that the flow of new homes coming to market has dwindled nonstop over the past two years. Consequently, estate agents have little stock to work with and the properties that are available are higher priced.

An estimated 17% of surveyors saw prices go up in September, compared to 13% in August.

 

Specialists in Construction Insurance

RICS chief economist Simon Rubinsohn said that the market does appear to be settled down now after the considerable challenges it faced throughout the spring and summer. He pointed out that buyers are apparently returning, but the problem is that there is no fresh stock on the market. This is not a unique situation for the UK property market but it currently has substantial ramifications for both house prices and turnover levels.

House prices rose in nearly all regions in September. In Central London and the North East, a decline in prices was being reported. Prices have been largely unaffordable in the capital in recent years, but surveyors expect them to lower in the coming months.

According to RICS, anecdotal evidence suggested that post-Brexit uncertainty and the stamp duty changes that came into effect in April, were negatively affecting the high end of the property market in particular.

Throughout the UK, overall property prices are expected to go up further, with 14% of surveyors predicting an increase instead of a decline. This represents the strongest anticipation that property prices are expected to go up in the near future since predictions made last March.

The letting sector is also growing exponentially, with demand for rental properties growing at the fastest pace in a year while landlord instructions were unchanged for the most part except in London and Wales where, RICS representatives said, they went up considerably.

A spokesperson said that London continues to be the only area where rents are expected to face pressure in the near future, while practically all other areas are anticipated to realise solid gains.

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