The number of homes sold per chartered surveyor reached its highest point since March 2008, according to the Royal Institution of Chartered Surveyors, though the market is at risk of entering a pricing bubble due to a continuing lack of housing supply.
Rics’ UK residential market survey revealed that over the festive period the average number of transactions per surveyor reached 21.3, more than double the lowest point of the downturn back in January 2009 when respondents were only selling 9.8.
With more sales now going through, growth in demand for rented accommodation has begun to slow significantly as a growing number of renters opt to test the sales market. Respondents note that increased confidence is a key driver behind growing activity.
Meanwhile prices continue to rise across the country the amount of homes coming onto the market still nowhere near enough to meet the higher level of demand, Rics said.
In October 2013, property experts warned there were concerns that property supply will not be able to meet demand considering the popularity of the Help to Buy scheme.
The Council of Mortgage Lenders warned an increase in the supply of new property will be a “crucial factor in success”. The homes need to be there for people to buy, as well as the finance to buy them.
Stephen Smith, director for housing and external affairs for Legal & General Network, also previously said there are not enough house to meet demand. He warned this lack is causing house prices to rise, “which will be detrimental to affordability over the long-term”.
According to Rics, during December, a net balance of 56 per cent more chartered surveyors reported growing prices. Significantly, every area of the UK saw prices increase with London and south-east England experiencing the biggest jumps.
Survey respondents predict that both sales and price numbers will continue to increase through the course of this year. This is largely being driven by easing in credit conditions, resulting in higher loan to value mortgages, and the ongoing imbalance between supply and demand.
Peter Bolton King, Rics’ global residential director, said: “ The housing market is starting to thrive once more. Sales are at their highest level in almost six years and this is being reflected right across the UK.
“Growing availability of affordable mortgages has released some pent-up demand from a market that, in recent years, has seen many viable buyers unable to enter the market. On the face of it, this seems like good news but unless we see a marked increase in the number of homes coming up for sale we could well be looking at a price rises becoming unsustainable in some areas.”
