According to the latest RICS Residential Market Survey, house price inflation is gathering pace, underpinned by the enduring mismatch between falling new instructions to sell and rising buyer demand.
As such, house price inflation has now quickened in each of the last seven months following a sustained period of easing towards the latter half of 2014. In net balance terms, the strongest growth came in East Anglia, Northern Ireland and Yorkshire & Humberside, although the vast majority of areas are seeing firm price momentum, according to the data.
The latest LSL house price index, released today, also shows that average house prices across England and Wales jumped £1,900 in August – the fastest rise seen for past twelve months. This takes property values to eighth peak this year, standing at £282,816 after a 4.1% annual increase.
The index also found that overall home sales have fallen behind 2013 levels for the first time this year, following a 14% monthly drop.
The RICS survey showed that new vendor listings declined for the seventh consecutive month, albeit the pace of decline did ease moderately. Nevertheless, new instructions have yet to record any meaningful uptick since the middle of 2013, pushing average stock levels to record lows.
“significant sales growth over the next twelve months”
With supply remaining tight, agreed sales showed only a modest increase for the fourth consecutive month. However, regional movements vary considerably from the national sales picture. The West Midlands, the North and the South West all posted solid growth in transactions, while East Anglia and the North West were reported to have seen a drop in sales volumes. Looking ahead, all areas of the UK are expected to chalk up significant sales growth over the next twelve months, with the outlook particularly upbeat in Wales and Scotland.
Adrian Gill, director of Reeds Rains and Your Move estate agents, commented: “House price growth now firmly has the bit between its teeth, and August witnessed the strongest monthly boost for a year. Average property values across England and Wales have jumped 0.7% (equal to £1,876) since July, which is the biggest monthly increase seen since August 2014. So far in 2015, monthly price rises had struggled to break above the 0.5%, so this clearly marks a step up in pace, as a shortfall of summer sellers puts buyers in hot contention for properties.”
Source: Property Reporter