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Shortage of Houses Continues to Pose Problems

A lack of properties coming onto the housing market is continuing to prove problematic, according to the latest Residential Market Survey by RICS.

Fall in Activity

The survey for January found little change in the number of new buyer enquiries, and only 5% of surveyors reported an increase in demand, which is the lowest reading since August 2016.

There was a fall in the number of new instructions, with 11% more chartered surveyors reporting a fall in new instructions in January than a rise, leaving average stock levels on agents' books still close to historic lows.

Sales numbers also continued to be relatively flat for the second month in succession, with 1% more chartered surveyors seeing a fall in sales over the month. However, within this average figure there are a number of regional variations, with the sales balance rising firmly in the South West but declining in central London.

On a more positive note, sales are apparently predicted to improve in the near term, with 15% more respondents expecting a rise over the next three months nationally. In addition, the balance of respondents predicting that sales will increase over the year to come reached a one-year high (+37 net balance).

House Prices Continue to Rise

The survey also looked at house prices, and found that 25% more respondents saw prices rise rather than fall in January. While the position in London is not positive, with house prices continuing to fall, most other parts of the UK continue to see prices rise, with the North West returning the highest net balance for a third survey running.

According to RICS, prices are expected to continue to rise over both the next three and twelve months across all regions of the UK except central London.

Halifax Reports Rising House Prices

The latest House Price Index from Halifax also found evidence of house price rises during January.

Its figures show that house prices in the last three months (November 2016 - January 2017) were 2.4% higher than in the previous three months. Prices in the three months to January were also 5.7% higher than in the same three months a year earlier.
However, on a monthly basis, house prices fell by 0.9% between December and January. This was the first monthly fall since August 2016 (0.3%) and came after four successive monthly increases. 

Halifax also found that total UK home sales in 2016 were marginally higher (+0.4%) than in 2015 at 1.23 million. In addition, sales in Quarter 4 2016 were 0.5% higher than in Quarter 3.

“The quarterly and annual rates of house price growth remain robust even though they are lower than in spring 2016,” commented Martin Ellis, Halifax housing economist. “UK house prices continue to be supported by an ongoing shortage of property for sale, low levels of housebuilding, and exceptionally low interest rates. These factors are unlikely to change materially during 2017.”

“Nonetheless, weaker economic growth and increasing pressure on spending power, along with affordability constraints, are expected to dampen housing demand, resulting in some downward pressure on annual house price growth during the year,” he added.

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