Ongoing shortage of housing stock in the region nudges prices up

The region’s housing market failed to pick-up during May as stock levels failed to increase resulting in buyer interest waning and prices increasing, according to figures out today.

During May, agents in Yorkshire and the Humber reported an average of 39 properties on their books (unchanged from April), which is close to an all-time low, according to the monthly RICS UK Residential Market Survey.

This lack of stock resulted in interest from potential buyers declining, with just 8% of respondents reporting a rise in buyer enquiries last month (down from 12% in April).

Looking at prices; the ongoing shortage of housing stock in the region edged prices higher in some areas last month with 19% of respondents reporting a rise in house prices during May (up from 8% in April).

By way of contrast, house prices also rose in the Midlands, Wales, the North West, Northern Ireland and Scotland during May. But house prices fell in London, along with the wider South East, South West, and East Anglia.

Looking ahead, respondents in Yorkshire and Humber are cautious about near term price and sales expectations with just 5% expecting prices to rise further over the coming three months and 3% anticipating sales transactions will rise over the next three months.

Turning to the lettings market, demand for rented properties (on a non-seasonally adjusted basis) declined last month with 14% of respondents reporting a rise in tenant demand (down from 28% the previous month), whilst 25% also reported a fall in landlord instructions last month (new rental properties coming onto the market).

Simon Rubinsohn, RICS chief economist, said: “Although some agents in Yorkshire and Humber are suggesting that a little more supply may have come onto the market in May, some of it from the Buy to Let sector, overall inventory levels in the region still remain near historic lows. Indeed, with the run rate on appraisals continuing to track below the numbers of a year ago it is premature to conclude that a sustained upturn in available stock is imminent.

“Against this backdrop, it is likely that the headline picture regarding activity in the housing market will remain subdued for some months to come. This is reflected in the feedback to the latest survey which shows sales expectations only marginally positive on a one-year view.”