Mind the gap! Property supply and demand widest since 2013, says RICS
Strong demand for property for sale and to rent not being met by new instructions yet, report member estate agents.
The gap between property buyer enquiries and instructions is at its widest since 2013, estate agents have told RICS.
Its latest Residential Market Survey covering May it has found that a net balance of -21% of the respondents from 600 branches across the UK said supply cannot keep up with increases in demand.
But RICS says this imbalance may dissipate soon because +30% of respondents reported an increase although this is down from +47% in April.
Also, while respondents expect sales to continue to rise in the coming three months, they do so at a lesser rate than reported in previous surveys.
This, RICS says, is because the property ‘sales boom’ is not anticipated to last, suggesting that the Stamp Duty holiday is the primary driving force behind the latest market trend.
Its report also reveals that a similar situation prevails in the private rental market, where a dearth of properties coming onto the market is in contrast to increasing demand for properties from tenants, pointing to looming rent rises over the summer.
RICS Chief Economist Simon Rubinsohn (pictured) says members revealed that they are more worried about the lack of supply in the sales and lettings market than they are about stamp duty ending.
“The government’s planning reforms including the relaxation of permitted developments rights is clearly designed to address this problem but the jump in five year expectations for prices and rents to their highest levels since the middle of the last decade suggests that there is a degree of scepticism about whether this approach will deliver a significant enough uplift in housebuilding numbers,” he says.
