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Dearth of homes ‘holding back’ the property market, Rics says

Dearth of homes coming up for sale is now ‘holding back’ activity in the property market as prices keep on rising amid strong buyer demand

  • The number of homes being listed fell last month, data from the Rics suggest
  • Buyer enquiries are up, but sales fell amid low listing levels, findings add
  • Price growth strong in Wales and the North West; more price hikes expected 


The number of homes coming up for sale continued to fall last month, fresh data from the Royal Institute of Chartered Surveyors has revealed.

A dire lack of new instructions is now ‘holding back’ activity in the country’s property market, the findings warned.

Amid a shortage of homes being listed, last month property prices kept rising, buyer enquiries increased, but sales levels slipped.

Estate agents now only have around 37 properties on their books, against about 42 back in January this year, the Rics told This is Money.

Problem: The number of homes coming up for sale fell in November, the Rics said

Simon Rubinsohn, chief economist at the Rics, said: ‘The issue of supply is gathering ever more importance in the feedback to the RICS Residential Market survey.

‘Critically, the theme runs strongly both through the latest set of contributor comments as well as the data around new instructions and the decline in inventory on agents books. 

‘Unless this trend is reversed soon, transaction levels may flatline in 2022 with limited choice proving more significant than any shift in the interest rate environment for new buyers.’

Oliver Miles, managing director of Oliver Miles estate agents in Swanage, said, – ‘Sellers are having a good time of it at the moment. 

‘There is very little property coming onto the market, which is driving up prices, but this may slow down approaching Christmas and into the New Year.’

Shortfall: The number of properties on estate agents' books has dropped in recent times

Shortfall: The number of properties on estate agents’ books has dropped in recent times

A lack of stock is driving competition between prospective buyers, which is resulting in house prices being pushed higher. 

A net balance of 71 per cent of experts surveyed said they saw property prices increase last month, which is identical to October’s survey and previous feedback points to house price inflation remaining consistent over the past four months, the Rics said.

It added: ‘Looking ahead, prices are expected to continue to drift higher at the national level, as a net balance of +66% of contributors envisage prices rising over the next year.’

Last month, property price growth was particularly strong in Wales, the North West of England and the West Midlands, according to the Rics. It said prices in London still appeared to be lagging the rest of the country ‘to a certain degree.’

Predictions: The Rics said it expects property prices to keep rising next year

Predictions: The Rics said it expects property prices to keep rising next year 

Mr Rubinsohn said the ‘imbalance’ between supply and demand was ‘likely to continue to be a key factor supporting prices and indeed, even if the cost of mortgage finance does begin to edge up, it is likely that house prices will continue to move higher through the coming year, albeit at a somewhat slower pace than over the past twelve months.’ 

With inflation rising to 4.2 per cent in October, the Bank of England is under pressure to act on interest rates, which are currently at a record low of 0.1 per cent. 

Some experts think interest rates could be hiked later this month, which would have a knock-on effect on new prospective property buyers or those on variable rate mortgage deals. 

Rental costs set to keep rising

In the lettings market, demand from prospective tenants grew sharply in November, the Rics said. 

But, landlord instructions fell, the data shows. Given this mismatch between rising demand and dwindling supply, rents are anticipated to increase ‘firmly’ over the short term, the Rics added.

Over the next year, experts project a near 4 per cent growth in rents at the national level, with rental growth expected to average 5 per cent per year over the next five years.

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