General election uncertainty drives new instructions down as house prices jump in April

14th May 2015


House prices rose once again in April as a result of the third consecutive monthly decline in supply, with new instructions falling at their fastest rate since May 2009, according to the Royal Institution of Chartered Surveyors.

The organisation’s latest UK Residential Market Survey showed that while 33% more surveyors saw prices rise over the month, the highest reading since last summer, new instructions slipped to a net balance of -21% – the eighth consecutive drop in the last nine months. Moreover, the flow of second hand stock onto the market dropped in most parts of the country.

Simon Rubinsohn, chief economist RICS said: “Alongside this, for the first time since August 2014, respondents reported an increase in prices in every area of the UK due to the shift in tone in the London market, where 28% more respondents saw prices rise, compared with 6% more surveyors in March who saw house prices fall.”

The group’s analysis highlighted that near term member expectations for prices and sales continue to point to relatively modest gains, but 72% of members expect prices to rise over the course of the next twelve months.  Meanwhile, in the lettings sector, there was no slowing in the growth of tenant demand, which is helping to underpin higher expectations for rents.

“Although anecdotal evidence suggests that these trends may have in part been a result of uncertainty ahead of the election, they are also reflective of deeper underlying problems. The downward trend in owner-occupation rates across the country is a visible sign that affordability constraints bite ever deeper, as does the squeeze on household budgets from higher rents,” added Rubinsohn.

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