UK house prices continue to rise as new listings dwindle
The number of new properties coming to market continued to slide in December, a closely-watched survey showed on Thursday, pushing house prices higher.
According to the RICS Residential Market Survey for December, a net balance of 9% respondents reported an increase in the number of new buyers looking for a property, the fourth consecutive rise. Although below November’s figure of 12%, it remains well above the -8% average seen in the second half of the 2010s.
However, a net balance of -14% of contributors also cited a fall in the number of new listings coming to their books, contributing to -13% reporting a drop in newly agreed sales. The average estate agent had just 37 homes on their books.
As a result, 69% more respondents reported a rise in house prices - although that was marginally below consensus of 70% - with 67% predicting prices will continue to rise over the coming year, almost unchanged on November’s reading of 66%.
Simon Rubinsohn, chief economist the Royal Institution of Chartered Surveyors, said: "Despite the termination of the stamp duty break at the end of September and the more recent increase in interest rates, the new buyer indicator remained in positive territory into the year end.
"Although respondents continue to highlight a lack of stock on the market, they do encouragingly still see some scope for transaction volumes to edge upwards over the coming months. More of a concern is the suggestion that the mismatch between demand and supply will drive house prices even higher through the course of 2022."
However, Gabriella Dickens, senior UK economist at Pantheon Macroeconomics, said: "We do not expect this mismatch to remain so pronounced, as buyer demand weakens in the face of higher mortgage rates and falling real disposable incomes. Many prospective home-buyers are going to face affordability issues this year.
"Accordingly, we think house price growth will fail to maintain its recent momentum, with month-to-month gains averaging just 0.2% in the first half of this year."
A total of 540 branches were surveyed for the December survey, with 329 responses.