House prices soar as supply of homes for sale stutters

Rising house prices were more widespread in April than at any point in the last 40 years, according to the latest monthly survey from the RICS, underlying the strength of the continuing post-pandemic housing market boom.

The Institution said a balance of 75% more surveyors from across the country said they had seen prices rises in the three months to April than saw prices fall, which is the highest figure seen since the 1970s. The number was a sharp rise from the reading of 62% in March.

In the RICS’ survey the number does not denote how quickly prices are rising, but instead indicates how widespread the experience of rising prices is.

The RICS’ survey also showed continued high expectations for future house price growth, and strong demand for housing, with a balance of 44% of surveyors reporting growth in enquiries in April, and a balance of 34% reporting a rising number of agreed sales.

The strength of the market came amidst declining stock availability levels, with the majority of surveyors reporting a falling number of new instructions.

David Boyden, an estate agent at Boydens in Colchester, Essex, said the market was “overheating”, and that he “desperately need[ed] new instructions to satisfy relocating applicants.

“Perhaps the market will settle and level out after the stamp duty holiday expires,” he said.

The surging market comes after chancellor Rishi Sunak decided in March to extend the current Stamp Duty holiday for properties below £500k by three months, with properties below £250k being exempt until the end of September.

Simon Rubinsohn, chief economist at the RICS, said the shortfall in supply relative to demand was the key theme from respondents to the latest RICS survey, adding that an uplift in delivery of new homes “does have a role to play” in moderating price growth.

In particular, he said anecdotal evidence from survey respondents emphasised a severe lack of stock in the private rental market, which was “likely to drive up rents sharply over the next year.”

He said: “Planning reforms as outlined in The Queen’s Speech are likely to provide part of the answer although it is critical, particularly with regard to permitted development rights, that quality and safety are not compromised.”