Demand for property rose to its highest level in over three years during April, as the government’s ‘Help to Buy’ scheme began to make an impact on the UK’s housing market, the latest residential market survey from the Royal Institution of Chartered Surveyors has revealed.
Last month, new buyer enquiries rose to their highest level in over three years, with 25 per cent more chartered surveyors reporting demand for property rose rather than fell.
The latest jump in enquiries, from 13 per cent more in March, strongly suggests that along with the existing Funding for Lending scheme, Help to Buy is attracting interest even if the mortgage guarantee element of the product is not due to come into effect until next year.
The scheme was announced in this year’s Budget and extends support to existing homeowners as well as first-time buyers to buy new build properties.
The plan comprises two main thrusts: an equity loan for those that are struggling to afford high deposits and a programme of mortgage guarantees that the chancellor said will support “£113bn worth of mortgages”.
Supply also increased, with new instructions to sell rising in April, albeit more modestly to a net balance of 8 per cent. With not enough housing to meet increased demand, prices are also on an upward trajectory as the survey recorded its first positive reading since June 2010.
Newly agreed sales improved too, with 19 per cent more surveyors reporting sales rose rather than fell during April from 11 per cent more in March.
Despite the improving picture for mortgage lending, many are still relying on the private rented sector, with demand for rented property continuing to outstrip supply. The result is that 18 per cent more surveyors expect rental prices to rise rather than fall.
That said, respondents to the survey anticipate rents rising by less than two per cent over the next year. Rics said this plateau may be in part due to a healthier housing market and increased access to mortgage lending.
Peter Bolton King, global residential director at Rics, said: “It is encouraging to see government initiatives are having an impact on the property market. ‘Help to Buy’ in combination with the Funding for Lending scheme appears to be giving the market a shot in the arm. Thankfully, sales are expected to pick up over the coming months, albeit from historically low levels.
“However there are some understandable concerns that the measures will also lead to higher prices. In view of this, it is critical that developers are as good as their word and speed up the delivery of new stock ’’