Save, make, understand money

First-time Buyer

‘Dire’ housing shortage and higher demand see prices rise

Paloma Kubiak
Written By:
Paloma Kubiak

House hunters are returning to the market after the EU referendum, but the number of properties available has dropped, pushing prices up.

The Royal Institution of Chartered Surveyors (RICs) October residential market survey revealed that while homebuyer demand increased by 10% from the previous month, the number of properties on the market fell, a trend which has continued for the past two years.

The “dire” supply shortage pushed prices up, with 23% more surveyors seeing growth rather than decline, up from 18% in September.

London remained the exception, with prices falling for the eighth consecutive month.

Surveyors expect central London prices to remain “broadly flat in the near future”. Price expectations are positive in all other areas of the UK over the next three months.

Letting market

Turning to the letting market, tenant demand picked up firmly in the three months to October with 29% of surveyors reporting a rise in enquiries and demand continuing to outpace supply in all areas apart from London.

Again, sluggish demand in the capital has caused 12% of surveyors to predict a fall in rental values in the capital over the coming three months.

However at national level, expectations for rental growth picked up firmly with 34% of surveyors forecasting a rise, rather than a fall in the months to come, up from 15% in the three months to June.

Simon Rubinsohn, RICS chief economist, said: “The dire shortage of available housing across the UK is continuing to push prices upwards, regardless of the uncertainty linked to the ongoing discussions around Brexit.

“We are only weeks away from the Autumn Statement and it will be interesting to see what measures, if any, the Chancellor will put in place to increase housing supply and create a more affordable market.”