The Royal Institution of Chartered Surveyors have stated that with an imbalance supply of demand in the housing market will “will lead to even stronger price gains over the next 12 months”
“This trend could be brought to a halt when base rates do eventually begin to rise but the dovish tone to the latest Bank of England inflation reports suggests the first move will come a little later than previously thought likely and that subsequent increases will be very gradual indeed” says RICS chief economist Simon Rubinsohn.
They believe the heart of the problem lies in the Governments inability to address the problem of new homes supply.
“A coherent and coordinated house building strategy is required across all tenures. This should include measures that will kick-start the supply-side, such as mapping brownfield, addressing planning restrictions and creating a housing observatory to assess the underlying economic and social drivers of housing and provide the impetus for solutions” explains RICS’ head of policy, Jeremy Blackburn.
The number of properties coming onto the market has fallen for 6 successive months while the number of new buyer enquiries has been increasing for four months, due to this RICS thinks there is no sign of changing in the immediate future.
East Angelia has seen the sharpest fall of new homes coming on the market and 9 out of 12 regions are down with new listings and each member of RICS has an average of just 47 homes on sale.
RICS is warning that there is now a “vicious cycle, as the limited choice on offer is deterring would-be movers and therefore further restricting new instructions”.