According to experts, house prices and rents are in the midst of a “noticeable” imbalance between supply and demand in an upward trend.
The number of newly negotiated home sales declined for the third straight month in September, with a 15% net balance of real estate professionals reporting a decrease rather than an increase in sales, the Royal Institution of Chartered Surveyors (Rics) said.
But a lack of available inventory creates competition among buyers, which pushes prices up, it said.
About 68% of the professionals said that property prices are more likely to rise than fall.
And a 35% net balance reported a decline in properties that hit the market in September.
More than two thirds (70%) of the surveyors assume that prices will continue to rise in the next 12 months.
A recently ended stamp duty vacation saw a rush of activity in the summer before tapering off.
House price growth has slowed since May when 82% of surveyors reported house prices had increased.
In the rental market, 62% of professionals reported an increase in the number of people looking for a rental apartment in September and a balance of 21% reported a decrease in new landlord instructions, continuing the trend seen since July 2020. The imbalance is expected to drive rents up, Rics said.
Chief Economist Simon Rubinsohn said, “The imbalance between supply and demand remains the most prominent issue in Rics’ latest housing market survey.
“And the feedback from members gives little reason to believe that this problem will be resolved in the foreseeable future.
“This is reflected very clearly in the forward-looking key figures, with both price and rent expectations being close to series highs, which suggests that affordability is falling more sharply at a time when the money markets are feeling interest rate hikes sooner rather than later Pressure is applied.
“Providing more new homes is part of the answer, but it is crucial that they are built in the areas where the shortage is most visible.
“It is also important that the tenure mix in the supply pipeline is broadly based in order to cope with the challenges both on the private rental market and in social housing.”
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