House prices were driven up again in April due to a sharp drop in new properties coming onto the market.
General Election uncertainty saw new instructions fall and house prices rise in all parts of the UK, according to the April RICS UK Residential Market Survey, published today.
April saw the third consecutive monthly decline in supply with new instructions falling at their fastest rate since May 2009.
While 33% more surveyors saw prices rise in April, the highest reading since last summer, new instructions slipped to a net balance of -21%, the eighth consecutive drop in the last nine months.
The flow of second hand stock onto the market dropped in most parts of the country.
Respondents' reported an increase in prices in every area of the UK for the first time since August last year.
This was due to a shift in tone in the London market, where 28% more respondents saw prices in the capital rise. In March, 6% more surveyors saw house prices fall.
The RICS said that 72% of members expect prices to rise over the next 12 months.
The downward trend in owner-occupation rates across the country is a visible sign that affordability constraints bite ever deeper, as does the squeeze on household budgets from higher rents.
Simon Rubinsohn, RICS chief economist, said: "It is conceivable that the decisive outcome to the election could encourage a pick-up in instructions to agents and ease some of the recent upward pressure on house prices, but it is doubtful that this will be substantive enough to provide anything more than temporary relief.
"Alongside an increased flow of second hand stock, it is absolutely critical that the new government focuses on measures to boost the flow of new build."
The latest Mortgage Monitor from chartered surveyor e.surv, also published today, said a rise in mortgages for higher-LTV borrowers is driving the housing market.
There were more than 10,000 house purchase approvals to higher LTV borrowers in April, up 7.3% year-on-year.
Lending to borrowers with small deposits represented 16.3% of house purchase approvals in April, up from 14.9% a year ago
Small deposit borrowing concentrated in Yorkshire and North West, where a quarter of all loans in Yorkshire were higher LTV
The number of house purchase approvals fell year-on-year, suggesting that higher LTV lending is helping to support total mortgage approval figures.
Richard Sexton, director of e.surv, said: "Borrowers with smaller deposits are making a welcome comeback, thanks to increased accessibility in lending, improving wages and highly attractive mortgage rates."
Comments