House prices rise as demand outstrips supply

YORKSHIRE house prices are continuing to rise as demand outstrips supply, according to the latest Royal Institution of Chartered Surveyors (RICS) UK housing market survey.

RICS said that although the supply of property is beginning to pick-up it is still insufficient to keep pace with the increase in demand, which points to further prices gains in the near term.

The net balance of chartered surveyors in the region reporting rises rather than falls in house prices reached 15% in October – up from 13% in September.

London is leading the upturn in prices with 95% of surveyors reporting rises rather than falls in the city – the highest figure since December 1996.

Vendors in Yorkshire are still returning to the market with 24% of the region’s surveyors reporting that new instructions had increased in October compared to 17% in September.

Significantly all the UK regions reported a rise in instructions for the first time since the onset of the credit crunch with the North, the South West and London leading the way.

Meanwhile, transaction levels also continue to rise with sales per surveyor in Yorkshire and Humberside now at 23 per month – up from 21 back in September.

As a result, the closely watched sales-to-stock ratio – a measure of market slack and a lead indicator of future prices – climbed a little higher.

New buyer enquiries in the Yorkshire region are still strong whereas on a national level the net balance of surveyors reporting an increase rather than a decrease in new buyer enquiries slipped from 35% in September to 31%.

RICS Yorkshire and Humberside housing market spokesman, Bruce Collinson, of Adair Paxton in Leeds said: “The housing market throughout 2009 has seen positive rises of activity with lulls in between.

“The middle to upper-middle priced property have been the drivers for this with some shortages reported and this almost certainly marked the bottom of this market earlier in the year.”

He added: “The gradual rise is in house prices looks set to continue but with slow growth as the region still needs more supply to keep pace with the demand.

“First time buyers are also still lagging behind and hindering the recovery of the residential property market because of banks tightening up on their lending and demanding large deposits.”