The average number of houses sold per chartered surveyor in the East Midlands jumped to its highest level in seven years during the first three months of 2014 as increasing numbers of buyers looked to test the housing market right across the country, says the RICS March Residential Market Survey.
In the three months to March, respondents in the East Midlands sold on average 33 homes, the highest amount since March 2007. This latest increase in transactions comes at a time when the market is showing greater signs of life right across the country. Last month, all parts of the UK saw buyer enquiries increase, with the exception of Wales where new interest was static after strong growth in previous months. Moreover, newly agreed sales rose most notably away from London and the South East for the second consecutive month.
However, while activity is now showing encouraging signs of life in the East Midlands, the market in general continues to be hampered by the lack of homes coming onto the market. New instructions from vendors continued to fall in March as the predicted ‘spring bounce’ failed to materialise, a situation that was reflected in most parts of the UK.
Significantly, the increase in activity continues to be accompanied by rising house prices. During March, 62 percent more surveyors across the East Midlands saw prices rise rather than fall. This was the most noticeable growth of prices outside of London and the South East.
Looking ahead, with no indication that the imbalance between buyer demand and homes on the market is going to change any time soon, surveyors expected prices to continue to increase as we enter the summer months.
RICS East Midlands Residential Spokesperson, Chris Charlton said: “We haven’t seen a first quarter to a year like this for over seven years with some of the highest registration of new applicants we have seen since 2007 and with the highest number of properties being place under offer in the first quarter again for many years.
“Buyers are looking to return to the market following the bottom of the housing cycle in summer 2013 and interest comes from all groups of buyer, from first time buyers through to families seeking to move up the property ladder and those downsizers now realising that they have perhaps waited long enough to finally take the plunge into the housing market and move on to a smaller more manageable property releasing equity for future investment. “
Chris also commented that, “it was encouraging at last to see that the movement in the market was focussing on other parts of the country and in particular the East Midlands where we continue to see growth and demand with positive price movements recorded as the highest outside of London and the South East. Although encouraging on the one hand, is mirrored by the continued lack of good quality housing stock coming to the market.
“The inevitable pressure for those seeking to move means a lack of choice and unfortunately in some cases can even lead to a seller taking their house off the market even though they have a good buyer in place as they are unable to find the next property to move to.
“The investment market continues to bounce back with good demand for both city centre flats and smaller traditional housing for rental. Growth comes as a result of continued low interest rates and poor returns from other investment bases. The market is set to continue to improve with the relaxation on capital that can be taken from pension pots over the next few years.
“Many surveyors around the East Midlands are reporting this lack of stock and supply which will have an inevitable impact on clients pricing expectations.”
Simon Rubinsohn, RICS Chief Economist, commented: “Now that the housing market recovery is well and truly underway and mortgage finance is more readily available, buyers seem to be looking to test the market right across the country, not just in the usual hot spots of the South East. That said, it is a major concern that we are not seeing enough houses coming onto the market. For the market to operate effectively, we desperately need more homes in areas where people want to buy and want to live. Until this happens we’re likely to see prices to continue to increase and it is going to be ever harder for many first time buyers to conceive of ever owning their own home.”