UK property prices rose again during June and as a result reached an eleven month high, according to latest research from the Royal Institution of Chartered Surveyors (RICS).
However, the survey also suggests that supply continues to fall, with the average stock of houses per surveyor falling to its lowest level since RICS began collating the data in 1978.
As supply drops, the investigation by RICS proves that demand increased in all areas of the UK with the exception of the South East. This increase comes despite a supposed cautious attitude from lenders.
What’s more the data suggests that 41% of surveyors expect house prices to increase within the next three months, the highest proportion since April 2014. 36% said that they expected sales to rise, despite the generally flat trend in new agreements.
‘Although much of the discussion about supply shortages has focused on the owner occupier market, the survey demonstrates in no uncertain terms that the issue, at least at a headline level, is just as visible in the rental sector,’ said Simon Rubinsohn, RICS’s chief economist. ‘This is most clearly reflected in both the house price and rental projections over the medium term which comfortably exceeds the likely growth in wages,’ he continued.
Rubinsohn went on to say, ‘there had been some hope that the removal of political uncertainty following the general election would encourage more properties onto the market but the initial indications are that this is not proving to be the case.’
‘Additionally, the recent flat pattern of appraisals by respondents to the survey suggests this is not about to change anytime soon As a result, it is hardly surprising that prices across much of the country are continuing to be squeezed higher with property set to become ever more unaffordable,’ he added.
Head of policy at RICS Jeremy Blackburn said that the Government has a long term plan to drive up owner occupation and property purchasing, but the survey shows that there is more to be done to aid supply.
Just as significant is the pressure that is clearly building across the rental sector, through which a large part of our population is housed. It is particularly important for the younger more mobile workforce that it is central to improving our economic productivity,’ he said.
Mr Blackburn also noted that the housing benefits cuts announced in the budget will lead to many tenants being pushed out of the private rented sector and into social housing.