News: UK housing supply rises for first time in over a year, say RICS

Fri, 12 Feb 16

UK housing supply has risen for the first time in over a year, as the market continues to face a rush of buyers.

Stock levels rose to 46 properties per branch, up from 44.5, in January 2016, according to the latest survey from the Royal Institution of Chartered Surveyors. The increase was largely concentrated in London where a significant lift in properties coming to the market was recorded in January (a net balance of 58 per cent more respondents noted an increase).

Supply, though, still remains 21 per cent down compared to a year ago, as the country still faces a shortfall in the number of homes on the market - a fact that has both driven capital growth for home-owners and also driven a generation into the private rented sector, where yields have been strong for landlords.

Now, though, buy-to-let seems to have fallen out of favour with the UK government, with a stamp duty surcharge being introduced for all second home purchases from April 2016. As a result, landlords are rushing to buy property ahead of the deadline, which is helping to push prices up (49 per cent more surveyors reported prices to have risen in January). Looking ahead, house prices are projected to rise further over the next 12 months, with 72 per cent more contributors expecting prices to increase rather than fall.

74 per cent of respondents expect there to be an increase of purchases by buy-to-let investors prior to the changes. Indeed, buyer enquiries rose for the 10th month in a row in January, with the pace of growth in enquiries accelerating for a second consecutive month.

As activity in the housing market gathers pace overall, agreed sales have risen over the month at the fastest pace since April 2014.

Simon Rubinsohn, Chief Economist for the RICS, welcomed the rise in new instructions as "very welcome."

"However, with buy-to-let investors rushing to get into the market ahead of the stamp duty hike," he added, "the near-term pressure on prices is intensifying despite a higher level of supply."

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