A lack of stock continues to drive up house prices and slow sales activity across the East Midlands according to the latest Residential Housing Market Survey from the Royal Institution of Chartered Surveyors.
For the second consecutive month chartered surveyors have reported a decline in new homes coming onto the market. This lack of stock is ultimately driving up prices across the region with 36% more respondents reporting price rises over the past three months. Further price growth is also expected for the coming three months, albeit it at a slower rate, with 17% more respondents expecting further price increases.
In addition, 14% of chartered surveyors reported a decline in new buyer enquiries for the second month in a row.
However, despite demand for properties decreasing in November, agents reported a slight rise in agreed sales across the East Midlands. 6% more respondents across the region reported growth in activity over the month but while this is the best outcome since February, caution remains, according to anecdotal feedback.
Supply shortages and the growth in sales activity, albeit only modest, alongside a lack of new instructions, has led to a further decline in homes for sale. Anecdotal comments suggest that many respondents expect the beginning of 2017 to be quiet reflecting the lack of fresh properties coming to market.
Paul Perriam MRICS of William H Brown/Bagshaws said: “Instructions continue to be in short supply. Despite this sales numbers are still healthy levels with multiple buyers in some cases due to the shortage of stock”.
Simon Rubinsohn, RICS chief economist, added: “A key issue for the housing market is the slowdown in transaction activity since the spring which is clearly being reflected in the RICS agreed sales data as well as in the official figures. Although there are some signs that the numbers may begin to edge upwards in the new year, the combination of macro uncertainty, the on-going supply shortfall, with stock levels around historic lows, and the myriad of tax changes impacting on buyers suggest that any pick-up in activity will be relatively modest. This is significant not just for the housing market itself but also for the wider economy given how much of consumer spending is tied in with home purchases”.
In the lettings market, tenant demand continues to outstrip supply. Despite Christmas approaching, 35% more chartered surveyors reported a rise in tenant demand but anticipate this to slow in the New Year.