The latest RICS UK Residential Market Survey has been released and reveals that property prices rose again during May.
34% more surveyors saw prices increase during the month, with the Nationwide Building Society suggesting that the average price of a property is now over £195,000. However, supply was found to have dropped for the fourth consecutive month, with 19% of surveyors reporting a dip in new instructions.
In spite of the fact that new buyer enquiries increased by 14% during May, many people questioned for the report said that they felt surprised of the lack of supply following the Tory election win. With the North West and London seeing the most increased slide in May, the bigger picture points to the fact that UK listings have not seen any substantial growth since mid 2013.
There was a different story in the lettings market, where tenant demand continued to increase. After a fifth straight month of growth, respondents feel that rents will rise across the UK during the next three months. In addition, the survey found that the most substantial rises are thought to be in the East Midlands and in the South West.
New buyer enquiries increase again
RICS’’s Chief Economist Simon Rubinsohn commented that, ‘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 across much of the country are continuing to be squeezed higher with property set to become ever more unaffordable.’
Rubinsohn continued by saying that,’ the feedback we are getting in the survey, which points to prices at a headline rising by another 25% over the next five years, suggests that there is no real confidence that the measures necessary to deliver a meaningful boost to new supply will be put in place anytime soon.’ He feels that, ‘away from the South East, the strongest price growth is anticipated in the North West which is envisaged to benefit economically from the focus of the government on developing the Northern Powerhouse centered on this area.’