Thu, February 11, 2016 - Today?s News : UK housing supply rises for first time in over a year
Thu 11 Feb 2016
UK housing supply has risen for the first time in over a year, as the market continues to face a rush of buyers.
Stock levels rose to 46 properties per branch, up from 44.5, in January 2016, according to the latest survey from
the Royal Institution of Chartered Surveyors. The increase was largely concentrated in London where a significant
lift in properties coming to the market was recorded in January (a net balance of 58 per cent more respondents
noted an increase).
Supply, though, still remains 21 per cent down compared to a year ago, as the country still faces a shortfall in the
number of homes on the market - a fact that has both driven capital growth for homeowners and also driven a
generation into the private rented sector, where yields have been strong for landlords.
Now, though, buy-to-let seems to have fallen out of favour with the UK government, with a stamp duty surcharge
being introduced for all second home purchases from April 2016. As a result, landlords are rushing to buy
property ahead of the deadline, which is helping to push prices up (49 per cent more surveyors reported prices to
have risen in January). Looking ahead, house prices are projected to rise further over the next 12 months, with 72
per cent more contributors expecting prices to increase rather than fall.
74 per cent of respondents expect there to be an increase of purchases by buy-to-let investors prior to the
changes. Indeed, buyer enquiries rose for the 10th month in a row in January, with the pace of growth in enquiries
accelerating for a second consecutive month.
As activity in the housing market gathers pace overall, agreed sales have risen over the month at the fastest
pace since April 2014.
Simon Rubinsohn, Chief Economist for the RICS, welcomed the rise in new insturctions as "very welcome."
"However, with buy-to-let investors rushing to get into the market ahead of the stamp duty hike," he added, "the
near-term pressure on prices is intensifying despite a higher level of supply."
Number of new buyers in London on the up
The number of new buyers registering in January 2016 was 24 per cent higher than in the same month in 2015,
as buyers and renters hunt for one-bedroom homes, according to estate agent Marsh & Parsons latest London
Outer Prime London areas are experiencing the highest New Year demand from interested buyers, with Barnes
and Bishops Park seeing among the strongest rises in the number of buyers registering locally to buy property.
However, this sudden surge in demand for Prime London properties is contrasting with a severe shortage of
housing stock in the capital. The supply of homes in Prime London fell 12 per cent year-on-year in the last three
months of 2015. This has led to intense competition to own a home in the capital, with 13 buyers for every
property in Prime London at the end of last year.
"The London property market has begun 2016 with a spring in its step," says Peter Rollings, CEO of Marsh &
Parsons. "The New Year always tends to bring a resurgence in purchase activity, as buyers shake off the last of
the Christmas holiday haze and re-focus their attention on climbing up the ladder. But the figures were currently
seeing are strong even by those standards.