Wednesday, 19 January 2022

‘Lack of properties’ still driving up prices

A LACK of new properties being listed for sale is continuing to drive house prices up, according to the latest residential market survey by the Royal Institution of Chartered Surveyors.

The monthly poll also found that most new buyers do not factor a property’s energy efficiency rating into their purchase.

In October, survey respondents pointed to another dip in the volume of sales agreed over the month, down nine per cent in total, with the main issue being a lack of stock for would-be buyers to choose from.

Despite a 10 per cent rise in the number of new enquiries, agents currently only have 37 properties on their books on average.

Meanwhile, 20 per cent of those polled have reported a fall in the number of new properties being listed for sale.

This is not only impacting on sales activity but is a significant factor behind current house price rises, according to RICS.

Seventy per cent of respondents cited a rise in house prices, with the trend expected to continue over the next three months (25 per cent) and year ahead (69 per cent).

Extra questions were added to the October survey to gauge consumers’ willingness to reduce their home’s carbon emissions and its impact on the market.

Interestingly, while a third of respondents have seen an uptick in demand for energy efficient homes, it isn’t currently impacting the property value.

More than three-quarters of respondents see little to no impact on sale prices of having an energy efficient property.

Whilst 62 per cent of respondents anticipate demand for energy efficient properties improving over the coming three years, the current barrier for many to improve their property’s energy efficiency is cost, with 85 per cent citing this reason.

RICS chief economist Simon Rubinsohn said: “Although the mood music around interest rates does appear to be shifting, for now the stronger influence on the housing market is the ongoing imbalance between demand and supply.

“The inventory on agents’ books appears to have slipped back towards historic lows and this seems to be underpinning both the current price trend and expectations for the next year.

“Meanwhile although there is likely to some drop in activity in the immediate aftermath of the expiry of the stamp duty break, most activity indicators currently remain solid.

“Indeed, the main challenge for buyers looking forward may once again be a lack of choice of property on the market.

“As long as there is a lack of choice for would-be buyers, it is clear that buyers’ ambitions to be more climate-friendly will have to move down their list of priorities.

“The data from today’s report suggests that additional government funding and investment alongside new financial solutions appealing to homeowners, landlords and investors could pave the way for decarbonising UK homes.”

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