insideKENT Magazine Issue 45 - December 2015 | Page 176

PROPERTY

supply shortfall
pushes south east prices higher
THE EVER-SHRINKING SUPPLY OF AVAILABLE PROPERTY IS PUSHING HOUSE PRICES
IN THE SOUTH EAST TO BREAKING POINT. HOUSE PRICES HAVE RISEN ACROSS
ALL PARTS OF THE UK FOR THE THIRD CONSECUTIVE MONTH, ACCORDING TO
THE LATEST RICS UK RESIDENTIAL MARKET SURVEY. IN OCTOBER, 50% MORE
CHARTERED SURVEYORS SAW HOUSE PRICES RISE (RATHER THAN FALL) ACROSS
THE SOUTH EAST, COMPARED TO A BALANCE OF 47% IN SEPTEMBER.

As prices rise in all areas of the UK, East Anglia
has become a “property hot spot” and has
consistently seen the fastest rises over the last
three months and 91% more chartered surveyors
reported seeing a rise rather than fall in prices in
October. In contrast, 25% more chartered
surveyors saw prices rise in London over the last
three months, with only 5% more expecting a
rise in prices in the capital over the next three
months – this is the lowest reading across the
UK over this period. However, the 12-month view
for the capital is still relatively strong.
Contributing to the rise in prices across the
country, demand from potential buyers grew
across the UK in October with 21% more
respondents seeing a rise in new buyer enquiries,
which marks an acceleration compared to
previous month. As such, demand continues to
considerably outpace supply, as the number of
new instructions remained unchanged. The supply
of new stock to the UK market has been in decline
since the middle of 2014, with the number of

new instructions only increasing in one of these
months.
Despite the lack of new stock to the market,
sales activity is relatively healthy and following a
small pick-up in agreed sales in September,
activity was little changed across the UK. This
chimes with HMRC transactions data, which
continues to see the number of sales rising
consistently over the year.
In the UK lettings market, demand is also
continuing to outpace supply in the three months
to October*. This has been the trend nationally
for some time, with the growth in demand
outstripping that of supply since
2009. Unsurprisingly, rental expectations remain
strong and respondents continue to expect rents
to rise over the year ahead. Rental growth is
anticipated to accelerate to an average of just
under 5% per year over the coming five years.
Simon Rubinsohn, RICS chief economist,
commented: “It is hard to get away from the issue

176

of (housing) supply when it comes to the current
state of the housing market. The legacy of the
drop in new build (properties) following the onset
of the global financial crisis is now really hitting
home with both the sales and letting markets
continuing to show demand outstripping supply
on a month-by-month basis.
“If the five-year projections from RICS members
regarding the outlook for both prices and rents
is anything to go by, property is set to become
even more unaffordable going forward. Making
the Government’s focus of boosting the delivery
of new homes is absolutely critical.”
*on a seasonally adjusted basis

www.rics.org