Data "a very good lead indication" of current market, says survey's author
House price growth remained firm across the UK last month amid low stock levels and despite a weaker sales outlook, according to a new survey.
The RICS Residential Market Survey, which polled 450 real estate agents across the UK, said more than 80% of respondents reported an increase in house prices in April, moderately up from a figure of more than 74% the previous month.
The survey added that it found little evidence of an easing in the recent strong pace of house price growth “at this point in time”. All parts of the UK continued to see a steady rate of house price inflation, with Northern Ireland and Wales both seeing “particularly sharp rates” of price growth, according to respondents.
The RICS survey also found that new buyer enquiries edged up “slightly” in April, although the picture was flatter for agreed sales. In addition, available stock remained scarce.
The 16-page survey also pointed out that the cost-of-living crisis “has yet to impact UK house prices”.
The April survey showed that new buyer enquiries rose by 10% in April – the eighth month in a row of increases, although respondents “once again” reported a subdued trend in listings, with less than 1% of respondents saying that new listings were falling instead of rising.
Regarding agreed sales, the picture was less buoyant, with the RICS survey saying they were flat after having risen in the past two months.
It added that due to the imbalance between demand and supply, property stocks remained “extremely low” at 38 per agency (agencies normally report around 55 properties each when stocks are high).
The number of appraisals also saw little change compared with the same period a year ago, which “does not bode especially well for the flow of supply coming on to the second-hand market going forward”, the survey noted.
Looking ahead, more than 62% of respondents expected home prices to continue to increase, rising further both in the near term and over the year ahead. This was broadly in line with the survey’s figures last month of more than 65%, but lower than the figure posted in February, when more than 78% expected more price increases.
Speaking about the findings to Mortgage Introducer, RICS economist Tarrant Parsons (pictured) said there were many reasons to expect the housing market to slow down, given that the broader economy was under “quite a bit of pressure” with rates increasing, but he stressed that this had not yet fed through the data.
He said: “There really isn’t any sign that this price growth is softening at this stage, even though it is quite widely expected. We read a lot of material around forecasts on the housing market not produced by us but by other commentators and they are expecting house price growth to slow, but as yet, we haven’t seen that come through.”
Parsons insisted the survey was a “very good lead indication” as to where house price indices were going to head. “It really does give us a lot of confidence in saying that house price growth isn’t slowing down at this point,” he said.
While the areas of strongest house price growth were in Scotland, Wales and Northern Ireland it was “elevated absolutely everywhere” including London, where prices had been lagging previously, particularly during the height of the COVID pandemic.
Tarrant went on: “International buyers have returned to the market there and it has caused a bit of an acceleration in price growth in the capital, but literally everywhere has very strong numbers.”
However, he said there could be “a slightly more subdued trend going forward”.
He added: “Although there is a wide expectation that price growth numbers will begin to cool quite nicely by the end of the year, we haven’t as yet seen that. And to me that would suggest that the overriding feature is still the lack of supply and quite solid demand. It is still producing quite a strong upward trend in prices for the time being.”
