Yorkshire based independent residential & commercial chartered surveyors.

Lack of Supply Continuing to Drive Price Expectations, David Moor Chartered Surveyors

  • Fresh new data and instructions are showing very little change in prices compared to November.
  • A Stronger demand has been underpinned by slowly easing in credit conditions.
  • Overall, the sales and price expectations still remain very strong.

The results that have come from the RICS survey for December show that the expectations for sales and prices have managed to hold their position in positive territory for both their 3 month and 12 month horizons. While the headline sales predictions net balance for the coming 3 months has actually taken a minor fall back to +58, it still symbolizes one of the uppermost readings we’ve seen since ’98, and is very consistent with further, stronger gains in transaction levels. Meanwhile, the figure we have for the 12th month climbed once again to an all-time high. As a result of this, we can now see a more positive outlook with the exceptions of data for the whole of the country.

Although we’ve seen a more stationery December but maintained a slight growth, we still continue to see a lack of new supply to the market. New instructions net balanced saw a very slight growth from +2 to +4 in December of last year, but there is still a lack in the supply of new enquiries received by estate agents. The reading for new enquiries took a slight fall last month (December), but at +48 it has managed to maintain a fairly solid position when comparing to past years. Current strength in demand is maintaining a steady and consistent trend alongside the less pressured credit conditions which we can see in the RICS loan to value measures. The underlying trend on the other hand in loan to value measures is continuing to rise not just for first-time buyers but also for existing owner-occupiers and buy-to-let purchasers.

From a low 13%, the Sales to Stock ratio has taken a more positive turn and is continuing to improve. Although this is progressive, it’s definitely worth noting that the most recent figure of 35.2% still shows that it’s still much lower than the numbers that were recorded pre-credit crunch. The incline trend in this increase is due to a growth in both sales per surveyor and a slowly declining property inventory. Tighter market conditions are becoming more and more noticeable as they are being reflected in the price headline net balance series – This has remained above +50 now since December, its first consecutive 4 months since 2002.

The growth of interest on the home sales market seems to have had a negative result on the lettings sector, with a growth incline now beginning to drop and flatten once more. According to RICS, the tenant demand indicator hasn’t really changed when compared to November. London, however, has seen a large increase in letting and remains fairly untouched – This is the complete opposite to the rest of the country, with declines being reported nationwide.

From this information, a more cautious view has been taking on the outlook of letting over the coming months / years. Over the coming years, lettings are predicted to receive yearly gains of around 4%. The unevenness between the housing demand and supply is seen more clearly in the sales market, projected increases of 5% in each of the coming 5 years.