House prices were driven up again in April, with the Royal Institution of Chartered Surveyors data showing a third consecutive monthly decline in supply and new housing instructions falling at their fastest rate since May 2009.
Rics said that the acceleration in price momentum appears to have been driven by a further contraction in supply, with the new instructions series falling deeper into negative territory.
Buyer demand remained broadly flat in April, as anecdotal evidence suggested that the election may have been weighing on demand in certain parts of the country, deterring some sellers from listing their properties for sale.
Data revealed that while 33 per cent more surveyors saw prices rise in April - the highest reading since last summer - new instructions slipped to a new balance of -21 per cent. This constitutes the eighth consecutive drop in the last nine months.
Rics added that the flow of second hand stock onto the market dropped in most parts of the country.
Respondents to the survey also reported an increase in prices in every area of the UK for the first time since August 2014. The reason for this is the shift in the London market - where 28 per cent more respondents saw prices in the capital rise - comes against 6 per cent more surveyors in March who saw house prices fall.
Rics said that near term member expectations for prices and sales continued to point to relatively modest gains, but 72 per cent of members expected prices to rise over the course of the next twelve months.
Elsewhere, in the lettings sector there was no slowing in the growth of tenant demand, which has been helping to underpin higher expectations for rents.
Simon Rubinsohn, chief economist at Rics, said: “It is conceivable that the decisive outcome to the election could encourage a pick-up in instructions to agents and ease some of the recent upward pressure on house prices, but it is doubtful that this will be substantive enough to provide anything more than temporary relief.
“Alongside an increased flow of second hand stock, it is absolutely critical that the new government focuses on measures to boost the flow of new build.”
Jeremy Blackburn, head of policy at the society, called the affordability and availability of homes in the UK a national emergency. “The last time we were building 300,000 homes was in 1963 under Harold Macmillan’s Conservative government, which utilised both public and private building.
“We need a coherent and coordinated house building strategy across all tenures. This should include measures that will kick-start a supply-side revolution, such as mapping brownfield, addressing planning restrictions and creating a housing observatory to assess the underlying economic and social drivers of housing and provide the impetus for solutions.
He added that introducing demand-side measures, such as extending ‘Right to Buy’, will not see the Conservatives deliver on their promise of 1m new homes by 2020.
ruth.gillbe@ft.com
