Lack of supply stagnating West Midlands housing market

A lack of new properties coming to the market continues to stagnate the West Midlands housing sector, according to latest figures from RICS.

In its April Residential Market Survey, the organisation said chartered surveyors were reporting a fall in the number of new homes coming onto the West Midlands residential sales market with a net balance of -27%.

This trend dates back to October 2015 and alongside concerns over Brexit and the upcoming general election is one of the reasons cited by respondents for the subdued market.

Where activity is strong, the buoyancy is said to be due to demand for the right home in the right area – such as those near the best schools.

Newly agreed sales also continued to fall during the month, while sales expectations for the coming three months were flat.

However, on the twelve-month horizon RICS members said sales and price expectations were firmly positive, with both expected to be higher at this point in 2018.

Richard Franklin, of Franklin Gallimore in Tenbury Wells, said his area was characterised by low stock levels, while first time buyers were rare.

Andrew Spittle, from Solihull-based Ruxton Surveyors, said: “The strong demand for housing continues to be driven by a lack of supply despite the uncertain economic and political outlook.”

The main findings from the survey are:

•    Prices remain positive across the region with 36% more respondents seeing an increase in the April report
•    Average stock on surveyors’ books at present drop to almost record lows of 42.
•    New buyer enquiries also fell once net balance -17%.

In the lettings market, tenant demand is rising moderately, although momentum was said to have faded since the start of this year. At the same time, landlord instructions were relatively flat. With demand continuing to outstrip supply across the region, respondents expect rents to rise in the coming three months.