House hunters are returning to the market after the Brexit vote but are struggling to find suitable homes, which means prices are going up in all parts of the country apart from central London, according to surveyors
The number of properties on the market dropped again in October, continuing the trend of the past two years, the latest monthly housing snapshot from the Royal Institution of Chartered Surveyors (Rics) shows. Interest from would-be buyers rose for the second month in a row, with a balance of 10% of Rics members reporting more demand.
The survey showed a small fall in new instructions in October. The combination of growing demand and falling supply pushed up house prices further, with 23% more surveyors reporting growth than a decline, up from a net balance of 18% in September.
London remained an exception where prices fell for the eighth month, with 16% more surveyors reporting falling rather than rising prices.
This reflected affordability issues and the slump in luxury home sales in inner London owing to Brexit uncertainty and stamp duty changes, while the outer boroughs were still seeing significant price growth, Rics said. Land Registry data has also suggested that the wealthiest buyers are shunning London, with sales of £10m-plus homes collapsing 86% in the past year.
Simon Rubinsohn, the 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 surrounding 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.”
As the market recovers after the shock vote to leave the EU in June, agreed sales rose slightly last month, with a balance of 5% of surveyors seeing an increase. All regions of the country are expected to experience a further rise in property transactions in coming months.
Prices are also expected to keep rising, with 18% more surveyors predicting growth in the next three months rather than a decline. Central London is the only exception where prices are forecast to be broadly flat in the near future.
The lack of homes to buy has fuelled demand in the lettings market, where a balance of 29% of surveyors reported a rise. London bucked this trend, with a balance of 15% reporting falling demand. This means rents are likely to fall in the next three months in the capital, in marked contrast with the rest of the country where rental growth expectations picked up, to 34% from 15% in the three months to June.