A property supply shortage is “seriously hampering” growth, forcing higher property prices in many parts of the country and fuelling fears of a property ‘bubble’, according to a new survey.
The Royal Institution of Chartered Surveyors’ January residential market survey revealed that during the month, the number of houses coming up for sale across the UK hit its lowest point since July 2012, despite the amount of potential buyers continuing to surge ahead in most areas.
However, despite vendor numbers not having seen any sustained increase for some months, some surveyors note that supply is expected to increase as we enter the traditional ‘spring bounce’.
During January, a net balance of 53 per cent more respondents across the country reported growing prices, slightly down on December. The cost of a home in the UK has now been rising for just under a year.
The number of homes sold per chartered surveyor reached 21.1 over the preceding three months. Although historically relatively low, this represents a sizable increase on the same time last year when respondents were only selling 16.
Last year, 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”.
Peter Bolton King, Rics’ global residential director, said: “It’s no secret that we are seeing prices go up in many parts of the country, driven largely by the lack of properties coming onto the market.
“With more people now in a position to buy a home than at any point over the past few years, there are simply not enough properties to satisfy demand. The upshot of this is increasing prices in many areas and this looks set to continue for the foreseeable future.
“That said, some of our members are have told us that, as the daffodils come out, more vendors could be looking to test the market as the traditional spring bounce begins to take effect. This can only be good news for a market that has seen supply struggle for a long, long time.”
