ResidentialApr 13 2017

Housing availability at record low, Rics reports

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Housing availability at record low, Rics reports

Britain's housing market appears to be stagnating as the number of houses on estate agents’ books fell to a record low in March, according to the Royal Institution of Chartered Surveyors.

The latest Rics Residential Market Survey showed a lack of supply is continuing to hold back growth, with 13 per cent more respondents seeing a fall in fresh listing rather than a rise over the month.

Branches were holding a record low average of just 43 unsold properties on their books, the survey found.

Rics chief economist Simon Rubinsohn commented: “The latest results for our survey show little change in the underlying picture surrounding both sales and markets. 

“High-end sale properties in central London remain under pressure, while the wider residential market continues to be underpinned by a lack of stock. This includes rents, which away from the capital are generally moving higher as demand outstrips supply.

“For the time being it is hard to see any major impetus for change in the market, something also being reflected in the flat trend in transaction levels.”

Transaction levels were hit by the supply shortage, as 3 per cent more respondents saw a fall in agreed sales rather than a rise – despite increases in Wales, Scotland and Northern Ireland.

New buyer enquiries remained flat for a third successive month, with the majority of regions reporting a decline in interest.

The lack of supply is continuing to underpin house price rises, with 22 per cent more respondents seeing a rise over the last month across the UK.

In London, 49 per cent of surveyors reported price falls, meaning sentiment was at its weakest since 2009, when the country was in the middle of an economic downturn.

Over the next 12 months surveyors have slashed their predictions for sales growth but the areas with the strongest price gains are expected to be in the north west and the Midlands.

Tenant demand in the lettings market continued to rise as 11 per cent more respondents noted an increase rather than a fall on a non-seasonally adjusted basis, which, coupled with a lack of supply, continued to push up rents.

Jane King, independent mortgage adviser at London-based Ash-Ridge Asset Management, said: “My problem is we have got tonnes of buyers but nothing is affordable. There are not a lot of properties on the market, but moreover there is a shortage of affordable properties.

“Mortgage-wise, my numbers are up on last year, so I am not seeing it burn out, but there is a lot of shared ownership about.

“I wonder is it because people are taking their homes off the market because they are not selling as people cannot afford to buy?

“No one likes to see their property hanging around in a window for months and months. Until prices come down, they are just going to sit there.”

simon.allin@ft.com