According to new data, a lack of houses for sale continues to push property prices higher.
According to the Royal Institute of Chartered Surveyors, although buyers seeking to relocate increased their inquiries in December, the average home on the books of estate agents remained low.
The ‘mismatch’ between supply and demand looks set to drive house prices even higher in 2022, Simon Rubinsohn, chief economist at the Rics, warned.
Up: Property prices continue to climb despite the shortage of listings.
He said: “Significantly the longer-term indicators capturing 5-year expectations indicate that the industry for the moment continues to anticipate rents and prices outpacing wages growth beyond this year’s end, absent a significant uplift in supply.”
This comes at a time when some lenders are on the verge of increasing their criteria for mortgage buyers in light of rising living costs.
HSBC might change how it calculates the maximum amount that homeowners can borrow to get a mortgage.
These would include the dramatic rise in energy costs in recent months which has pushed up household outgoings.
Sticking Point: According to the Rics, there is still a low number of houses for sale.
Shifts – A chart that shows fluctuating buyer inquiries in Britain, since 2000
Expectations
This survey considers the opinions of Rics members, who are chartered surveyors.
Rics stated that ‘a headline net balance of 14 per cent of contributors noticed a decline in listings, thus extending the sequence of negative readings of this metric into an additional month.
According to latest data points, “Also new instructions have fallen or remained the same across all regions of the UK.”
Although sales in agreeds declined in December, increasing numbers of estate agents expect that levels will rise over time, the survey showed.
Hudson Moody, the managing director, in York said Ben Hudson: “The year started well, but there are not many new properties available to sell. This is holding back sales.”
Meanwhile, James Watts, of Robert Watts Estate Agents based in Bradford, said: ‘Sales figures are unreliable for December due to the holiday period but the level of demand is still significantly higher than supply and this is a trend that keeps exacerbating. With agents trying to sell stock, this results in a significant downward pressure on fees.
A net balance of +69% of the experts who surveyed witnessed an additional increase in property prices during December.
The Rics said: ‘This is virtually unchanged from last month’s reading of +71 per cent and remains consistent with a strong pace of house price inflation across the country as a whole.
“All price areas are continuing to experience a strong increase in prices with no sign of easing in the most recent feedback.”
The Rics stated that it expects property prices to stay ‘elevated’ through the end of this year. The Rics stated that all areas of the UK will see an increase in property prices in the coming year, with particular expectations for Scotland and South West England.
Official figures released on Wednesday showed that house prices rose by 10% annually in November. This is an increase of 9.8% in October.
Experts warn that with rising living expenses such as electricity bills, buyers should not be too ambitious when searching for their dream home.
Some also suggested that rising living costs could limit people’s confidence to buy a property.
The average UK house price in November was £271,000, which was £25,000 higher than a year earlier, the Office for National Statistics said.
In Scotland, the average house price hit a record level of £183,000 in November. From a 11% increase in October, property values increased by 11.4% over the past year.
Average house prices increased over the year in England to £288,000 (9.8 per cent annual growth), in Wales to £200,000 (12.1 per cent), and in Northern Ireland to £159,000 (10.7 per cent).
With an average price rise of 12.9 percent in the last year, South West England saw the largest annual increase in house prices.
London saw the lowest increase in house prices annually, at 5.1 percent.
Rental market: Instructions to Landlords ‘thin’ on the ground
Rics posted an update today on the lettings marketplace and showed that tenants continue to demand more in December.
The survey found that 27% of respondents reported a drop in the number of landlords searching for tenants.
Due to the persisting disparity between supply and demand on the lettings marketplace, the expectations of near-term rental growth increased further in December.
The next 12 months will see rents rise across the UK.
Rubinsohn stated that despite the fact that there are more cost-of-living challenges than ever before due to higher energy prices, rents will likely be increasing over the next 12 months.
