House prices rise but growth slowing
More chartered surveyors in Yorkshire and Humber reported house price increases across the region last month when compared to July.
In a UK Residential Market Survey by the Royal Institution of Chartered Surveyors (RICS), August saw 25% more chartered surveyors report a rise in house prices in the region, up from 18% in July. The survey revealed that 12% expect house prices in Yorkshire and Humber to continue rising over the next three months.
Looking further ahead, although price expectations remain subdued for the remaining months of 2017, nearly half (49%) of respondents anticipate prices will rise over the coming 12 months.
August saw little change in the level of buyer enquiries, which remain flat. Agreed sales also showed little change with only 8% more respondents seeing a rise in sales.
Supply also continues to be an issue, with respondents reporting a fall in new sales instructions again. This has been an ongoing problem throughout recent years including throughout every month of 2017.
Following such a sustained period of deteriorating sales instructions, average stock levels on agents’ books in the region are still near an all-time low. In August, Yorkshire and Humber agents reported an average of 45 homes on their books, compared with 84 in August 2014.
Jonathan Milner, of Paisley Properties in Huddersfield, said: “The sales market is continuing to bounce along. But new stock entering the market is low, with too many agents chasing too few quality, saleable properties.”
In the lettings market, tenant demand continued to edge higher, with 29% of respondents reporting an increase in rental demand (up from 16% during the previous month), but only 4% of agents saw landlord instructions increase. However, 36% of agents expect rents to edge higher over the coming three months, due to rising demand for homes for rent.
Given the likely resulting supply and demand mismatch in the lettings sector, RICS predicts that over the next five years rental growth will outpace that of house prices, averaging 3%, per annum (against 2% for house price inflation).
Simon Rubinsohn, RICS chief economist, added: “It is interesting that over the medium term, the conclusion of the latest survey is that rental growth is likely to outpace increases in house prices. Although the Build to Rent offer is now stepping up a gear, there clearly is some doubt as to whether it can do so at a fast-enough pace to address the shortfall which may result from the more hostile environment for Buy to Let investors.”
