8th October 2015
Property sales across Britain have markedly increased reaching a 16-month high according to the Royal Institution of Chartered Surveyors (RICs)
The group believes the pace is likely to continue throughout the autumn period.
Its latest survey indicated that house sales picked up across the UK in September, supported by a modest improvement in the availability of mortgage finance.
Across the UK, agreed sales rose at the quickest pace since May 2014, with 14% more chartered surveyors seeing a rise.
The North, East Anglia and Scotland posted the sharpest rises in activity over the month with the East Midlands the only region to see a material drop in sales albeit following an increase in the region in August.
The stronger sales trend in the UK is broadly reflective of an upturn in demand, which has been visible in the data since the early spring. In fact the number of new buyer enquiries rose for a sixth consecutive month across the country with 18% more chartered surveyors reporting a rise in demand.
The pattern being seen by chartered surveyors echoes recent lending data including that highlighted by the Bank of England, showing mortgage approvals at an eighteen month high and up 12% compared to a year ago.
As the availability of mortgage finance appears to be improving, the average ‘perceived’ LTV ratio captured by respondents to our survey edged up to 79.3% with first time buyers seeing credit conditions relax most noticeably over the month.
Although activity is picking up, the ongoing lack of new instructions and the resulting limited stock on the market continue to be an issue for the sustainability of the market. The number of new instructions has fallen in thirteen of the last fourteen months.
Significantly, 40% of respondents feel the biggest factor behind the negative trend in new instructions is the lack of stock already for sale, which is deterring would be movers as they struggle to find a suitable property to move on to. The next most cited influence was economic uncertainty, followed by stretched affordability.
As a result of the persistent supply demand imbalance, the national house price indicator continues to rise strongly which is likely to be reflected in key house price indices over coming months and into the first half of 2016.
Commenting on the data, Simon Rubinsohn, RICS chief economist said: “Activity is now picking up which is encouraging, but unless the stock being sold is replenished there is a limit to how sustainable this modest improvement in market turnover will prove to be. And, unfortunately, the indications are that we are locked in a cycle where the lack of available properties on agents’ books is itself deterring some potential vendors from thinking about putting their own property on the market.
“Against this backdrop, it is hard not to see prices continuing to move higher over the coming months and into the early part of 2016, notwithstanding the present concerns regarding the affordability of housing in some areas of the UK that are being highlighted by respondents.”