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A lack of choice for new buyers is driving up house prices as sales fall.
A severe shortage of homes on the market for sale continues to drive house prices upwards across much of the UK, although buyers are still pushing back against higher transactions costs at the top end of the market, most notably in prime areas of London.
The number of new sales instructions remained near an all time low in April, according to the Royal Institution of Chartered Surveyors (RICS).
The lack of choice for would-be buyers across the UK is still a key issue and in April new instructions remained negative for a 14th month in a row at a national level, leaving average properties on estate agents books hovering close to record lows.
With the number of property sales falling, owed in part to a lack of choice for new buyers, home prices are actually rising across many parts of the country with almost a quarter – 22% – of surveyors who took part in the latest RICS survey witnessing an increase in home prices in April.
As such, house prices continue to increase nationally, with the pace of growth steady over the last five months, although there is variation across the UK.
In central London, the indicator on home prices has been in negative territory for 13 months. In addition, home price growth has eased noticeably in East Anglia recently and, along with the North East, was not seen any increase in April.
At the other end of the scale, in the North West 67% more respondents noted higher – rather than lower – property prices in April, with the reading having been above 50% in this part of the country in each of the last seven months.
Looking ahead at the national picture for near-term expectations for house prices, these have eased slightly, suggesting that home price inflation is anticipated to slow in the three months ahead.
Notwithstanding this, the 12-month expectations predict that all parts of the UK will see growth in house prices, underpinned by the lack of stock.