There are worrying signs that UK house prices could start to rise again, driven by a second monthly fall in the number of homes coming onto the market, according to surveyors and estate agents.
Although the number of sales and inquiries from prospective homebuyers flatlined in March, the Royal Institution of Chartered Surveyors (Rics) said the proportion of its members who were expecting prices to increase over the next year was at its highest level since spring 2014.
Expectations of price rises were being driven by a shortage of stock for sale, it said, with March seeing the number of properties being put on to the market falling for a second month running.
In most parts of the country, Rics said the imbalance of supply and demand was pushing up prices. Across the UK, 21% more surveyors reported a rise in house prices in March, up from 15% in February. Also, 15% more surveyors expected prices to increase over the next three months compared with 10% in February.
A net balance of 70% of surveyors predicted price increases in the year ahead averaging 2.5%, marking a 10-month high.
The chief economist at Rics, Simon Rubinsohn, said: “The boost that was given to the housing market by the Help to Buy scheme has begun to dissipate and activity levels have slipped back. Even more worrying are the tentative signs that price momentum could be set to pick up once again as the supply of stock to the market continues to fall.”
Rubinsohn added that anecdotal evidence suggested election uncertainty may be having some impact on the market. However, he added: “Underlying the trends visible in the latest survey is a very real housing crisis that will urgently need to be addressed by the next government.”
