According to the Royal Institute of Chartered Surveyors UK residential market survey, hopes for post-election supply have failed to materialise with vendor instructions falling for the fourth consecutive month.
Despite the fact that 34 per cent more surveyors saw prices rise in May, supply to the market declined for the fourth consecutive month with 19 per cent more surveyors reporting a drop in new instructions.
The survey showed that house prices rose again in May, and at a quicker pace than in April, as the stock of homes per UK surveyor fell to a record low since the data series began in January 1978.
There was an increase in new buyer enquiries, which increased from a net balance of 4 per cent in April to 18 per cent in May, however many respondents to the survey expressed some surprise at the lack of ‘post-election bounce’ in fresh supply following the unexpected and decisive outcome to the poll.
Alongside this, although respondents’ reported a slight improvement in credit conditions with higher perceived loan-to-value ratios on mortgages to first-time buyers and existing home owners, the average number of newly agreed sales per surveyor rose only slight to 19 - down from 23 in May 2014 and up for 18.9 in April 2015.
Rics stated that unbalanced price growth continues to be particularly marked across the market at a regional/country level.
The highest price growth was reported in the last three months in the north west, Northern Ireland, East Anglia and the south west by surveyors.
Additionally, London is now seeing a slight turnaround, following seven consecutive months in which the net balance for prices was in negative territory, it has now been positive for two months in succession.
Simon Rubinsohn, chief economist of Rics, said: “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.
“Indeed the feedback we are getting in the survey, which points to prices at a headline rising by another 25 per cent 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.
“Significantly, 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.”
ruth.gillbe@ft.com
