The exceptionally busy sales market will soon lead to significant jumps in house prices, RICS has predicted in its housing market report for August, with ‘virtually every part’ of the UK already reporting increases.
The organisation says its estate agency members have reported a frantic August with a net balance of +63% seeing an increase in buyer interest, a net balance of +46% reporting an increase in instructions and +61% experiencing an upturn in agreed sales.
Consequently, RICS says its house price growth indicator has now hit a four-year high, although agents are less certain about the housing market in a years’ time, with a net balance of -17% predicting the current boom will have subsided by then.
Nevertheless, RICS says that at a national level, a net balance of +44% of respondents reported an increase in prices, the strongest reading since 2016.
This is up from a net balance of +13% in July and marks a dramatic turnaround compared to the reading of -33% registered back in May.
“The latest RICS survey provides firm evidence of a strong uplift in activity in the housing market which should help support the wider economy gain traction over the coming months,” says Simon Rubinsohn, RICS’ Chief Economist (pictured, above).
“More of a concern is the pick-up in prices which could intensify issues around affordability in some parts of the country. Disaggregated data shows demand generally to run ahead of supply.”
The RICS ‘net balance’ system takes the number of agents reporting an increasing trend as a positive percentage increase and subtracts the number reporting a downward trend.
Jeremy Leaf, north London estate agent and a former RICS residential chairman, says: ’This latest outcome from one of the more reliable sources is not surprising bearing in mind the considerable improvement we have seen over the last month or so.
“Buyers and sellers have more confidence and more money in their pockets taking advantage of the stamp duty holiday and low interest rates.
“However, we are not seeing prices rising sharply – they are kept in check by affordability concerns and an increase in supply which is giving more choice to serious buyers. Greedy sellers will miss out if they don’t recognise the realities of the present market.
“Looking forward we don’t see much change at the moment, irrespective of the worsening economic news on the horizon and the possibility of a no-deal Brexit. On the contrary, the return to school and more going into work has increased the ‘why nots’ over the ‘whys’.’