In most parts of the country, the supply versus demand imbalance led to 21% more surveyors reporting a rise in house prices in March (up from 15% in February) and 15% more surveyors expecting prices to increase over the next three months compared with 10% in February (albeit the results for both are significantly lower than in March 2014).
Nationally, Northern Ireland continues to outperform the rest of the UK with the strongest house price growth in March and the highest price expectations over the next three months. However, across much of the rest of the UK, particularly in Wales and Scotland, price gains over the next three months are expected to be much more moderate.
In London, a lack of prospective buyers saw enquiries and the number of agreed sales both fall for the 11th consecutive month and 24% more surveyors reported a decline in the number of new properties coming onto the market for sale.
However, compared to the start of the year when 42% more surveyors reported a decrease in prices, just 13% more surveyors saw prices fall in March and across the whole of the UK, the average surveyor sold 19.5 properties – reflecting activity since Autumn – although it remains some way down on where it was in the early part of 2014.
Simon Rubinsohn, RICS Chief Economist, said:
"The boost that was given to the housing market by the Help to Buy scheme has begun to dissipate and activity levels have slipped back.
"Even more worrying are the tentative signs that price momentum could be set to pick up once again as the supply of stock to the market continues to fall. Anecdotal evidence does suggest that election uncertainty may be having some impact on the market, but underlying the trends visible in the latest survey is a very real housing crisis which will urgently need to be addressed by the next government.
"It is significant that price expectations nationally are accelerating both at the three and twelve month time horizons and at the latter they are at their highest level since the spring of last year."
Brian Murphy, Head of Lending at Mortgage Advice Bureau, commented:
“Surveyors are reporting that transactional activity and buyer enquiries largely flat lined in March as consumer demand begins to pull back in the run up to the general election. However, this downturn in activity isn’t expected to continue in the long-term, with 15% of RICS survey respondents expecting sales levels to increase over the next quarter.
“In terms of mortgage finance, affordability conditions are generally positive, with reports of greater availability of high loan-to-value lending over the past three months. Consumers are also able to take advantage of record low mortgage rates, which are continuing to fall. However, of most concern is further tightening in the supply of properties, which appears to be behind an increase in house price momentum.
“There is a severe lack of fresh properties coming onto the market, with current housebuilding levels failing to keep up with demand. If the imbalance between supply and demand is not addressed as a matter of priority, prices may be driven to levels that could see some first-time buyers with smaller deposits priced out of the housing market.”
Shelley Naughton, Head of Professional Negligence at Your Legal Friend, added:
“With the number of properties coming onto the UK market falling for the second consecutive month, house prices are being pushed upwards. A lack of property for sale is likely to lead to more people postponing buying new homes and instead opting for improvements to their existing properties. Our worry is that this option could leave people vulnerable to poor workmanship as rogue tradesmen take advantage of those looking for a cheaper deal in a competitive market. It is important to remember that when carrying out work on your home, it pays to take your time and find the best tradespeople for the job.”
