RICS Market SurveyThe Residential Market Survey for RICS for March 2014 reports sales hitting a six-year high, following increased activity in the housing market spreading across the country.

Key facts:

  • Sales per surveyor increased to its highest level since February 2008
  • LTV ratios for first time buyers creep upwards
  • Decline in new instructions for the 3rd month running – strengthening the upward shift in prices

The March 2014 survey continues to show that the imbalance between the supply and demand in the housing market is the driving force behind the house price appreciation. This is helping to continue the trend that was seen to start in min-2013 of the upward trend of prices.

The headline price balance has nearly reached +60 and marks the 11th consecutive month where house price increases have been registered at this level and is the longest period since the start of the financial crisis.

Regional

The strongest gains unsurprisingly were seen in London and the South East which had nearly +80 and approximately +75 respectively. Indeed 8 of the 12 areas of the UK recorded a net balance above 40, these being London, South East, Wales, South West, Yorkshire & Humberside, North West, West Midland and East Midlands.

At the bottom of the pile was the North, however with a net balance of approximately 20, it is still positive. Just behind the North was East Anglia and Scotland.

Price Expectations

The price expectations seen by surveyors remain strong with the 3 and 12 month expectations broadly unchanged at +48 and +77 respectively. Indeed contributors have predicted that further ahead we would expect about 6% increase per annum over the next five years.

Lettings Market

Tenant demand continues to rise, although more moderately that last month. Landlord instructions also remained flat as has been the pattern since October 2013. These two combined does mean that rents are expected to increase over the next three months.

Net Balance explained

Net balance = Proportion of respondents reporting a rise in prices minus those reporting a fall (if 30% reported a rise and 5% reported a fall, the net balance will be 25%).

Surveyor comments

Simon Bainbridge, Smiths Gore, Darlington, 01325 370500, smithsgore.co.uk –
The early year sales tempo seems to be stalling a little and there is delay due to lack of new instructions coming to market. We remain optimistic that the market will continue to steadily improve but there is no surge at present.

Martin Pendered, Martin Pendered & Co Ltd, Wellingborough, 01933 228822 –
Very strong demand in March has seen strong sales and competition amongst buyers. New
instructions are rising more slowly than demand which will push prices up over the next
few months.

Charlotte Crosby, Shoulders & Son, Melton Mowbray, 01664 410166 –
Valuations remain thin on the ground, although we have seen a small improvement in March compared to January and February.

Karen Bell, Cooper & Tanner, Warminster, 01985 219188 –
Market is active but still patchy – one minute busy the next slack. Rents are holding in this area, anything overpriced sticks.

Anthony Filice FRICS, Kelvin Francis Ltd, Cardiff, 02920766538, www.kelvinfrancis.com
2 bedroom properties are in short supply and are letting quickly. Even 3 bedroom properties are scarce, forcing rents up. Some vendors who cannot find a property to
purchase, are renting in the short term and full rents are being achieved.