The housing market continued to gain momentum in September with property sales soaring to a 16-month high, figures showed today.
According to a report from RICS, the Royal Institution of Chartered Surveyors, sales rose at the quickest pace since May 2014, with 14% more chartered surveyors seeing a rise. This is a 16 month high and the fifth consecutive month that sales have increased.
Here are more highlights of their report:
- Agreed sales rise at the fastest rate across the UK since May 2014.
- Prices increase further across all parts of the UK.
- New buyer demand continues to outweigh instructions to sell.
The North, East Anglia and Scotland posted the sharpest rises in activity over the month with the East Midlands the only region to see a drop in sales although this follows an increase in the region in August.
The stronger sales trend in the UK is broadly reflect an upturn in demand which has been seen since the early spring. The number of new buyer enquiries rose for a sixth consecutive month across the country with 18% more chartered surveyors reporting a rise in demand.
The pattern being seen by chartered surveyors echoes recent lending data including that highlighted by the Bank of England, showing mortgage approvals at an eighteen month high and up 12% compared to a year ago.
As the availability of mortgage finance appears to be improving, the average ‘perceived’ LTV (loan to value) ratio captured by respondents to the survey edged up to 79.3% with first time buyers seeing credit conditions relax most noticeably over the month.
Shortage of home being put up for sale
But while demand strengthened, there continued to be a shortage of homes being put up for sale.
New instructions have now fallen in 13 of the past 14 months, and the lack of properties is seen as a significant issue for the sustainability of the market.
There are few signs that the situation will improve in the near future, with 40 per cent of estate agents saying they thought the biggest factor behind the negative trend was the lack of homes already for sale, which was deterring potential movers from putting their property on the market, as they could not find a home to move to.
The next most cited reason was economic uncertainty, followed by stretched affordability.
The ongoing mismatch between supply and demand is continuing to put upward pressure on property prices, and this trend is expected to continue for the rest of this year and the first half of 2016.
Simon Rubinsohn, RICS chief economist, said: “Activity is now picking up which is encouraging, but unless the stock being sold is replenished there is a limit to how sustainable this modest improvement in market turnover will prove to be.
“And, unfortunately, the indications are that we are locked in a cycle where the lack of available properties on agents’ books is itself deterring some potential vendors from thinking about putting their own property on the market.”
He added: “Against this backdrop, it is hard not to see prices continuing to move higher over the coming months and into the early part of 2016, notwithstanding the present concerns regarding the affordability of housing in some areas of the UK that are being highlighted by respondents.”
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