The number of homes for sale hit a record low in July as demand from potential buyers continued to increase, research showed today.
Buyer demand rose at its fastest pace since February last year, with 25 per cent of estate agents reporting an increase, according to the Royal Institution of Chartered Surveyors (RICS).
But the number of homes for sale remained on a downward trend, with 22 per cent more estate agents reporting a drop in new instructions than those who saw a rise.
Unsurprisingly, this fall contributed to the average number of properties estate agents had on their books falling to a new record low.
RICS said the mismatch between supply and demand was continuing to push house prices higher, with the rate at which property values are rising accelerating for the sixth consecutive month.
Overall, 44 per cent of estate agents reported an increase in property values during the month, while 41 per cent predict further gains in the coming three months.
RICS said all areas of the country were projected to see “sizeable house price gains” in the coming year, with confidence highest in East Anglia and Northern Ireland.
But it warned that the limited number of homes for sale on estate agents’ books was acting as a restraint to both transaction volumes and new instructions.
Despite the number of buyers increasing for the fourth consecutive month, the level of agreed sales remained broadly unchanged, although 37 per cent of estate agents expect sales to gain momentum over the coming three months.
Simon Rubinsohn, RICS chief economist, said: “A renewed acceleration in house price inflation allied to a fairly flat trend in sales activity highlights the very real challenges being presented by the housing market.
“More worrying still is the suspicion that the imbalance between supply and demand will lead to even stronger price gains over the next twelve months.
“This trend could be brought to a halt when base rates do eventually begin to rise, but the dovish tone to the latest Bank of England Inflation Report suggests the first move will come a little later than previously thought likely and that subsequent increases will be very gradual indeed.”
Meanwhile, demand for properties to rent continued to outpace the number of new homes being made available to let.
As a result, 34 per cent of surveyors expect rents to rise across the UK, with those in the West Midlands and south east predicting the biggest increases.Posted on : Aug, 19 2015