House prices in Yorkshire rise but not expected to grow further over coming months

House prices in Yorkshire rise but not expected to grow further over coming months
House prices in Yorkshire rise but not expected to grow further over coming months

More chartered surveyors in Yorkshire and Humber reported house prices increased in Yorkshire and Humber last month, according to the latest monthly RICS (Royal Institution of Chartered Surveyors) UK Residential Market Survey.

In the August, 25% more chartered surveyors reported a rise in house prices in the region (up from 18% in July). But only 12% of respondents expect house prices in Yorkshire and Humber to continue rising across the next three months.

Looking further ahead, although price expectations remain subdued for the remaining months of 2017, nearly half (49%) of respondents anticipate prices will rise over the coming 12 months.

August saw little change in the level of buyer enquiries, which remain flat.  Agreed sales also showed little change with only 8% more respondents seeing a rise in sales.

Supply also continues to be an issue, with respondents reporting a fall in new sales instructions (homes coming on to the market) again. This has been an ongoing problem throughout recent years including throughout every month of 2017.

What’s more, following such a sustained period of deteriorating sales instructions, average stock levels on agents’ books in the region are still near an all-time low. In August, Yorkshire and Humber agents reported an average of 45 homes on their books, compared with 84 back in August 2014.

Jonathan Milner, MRICS of Paisley Properties in Huddersfield said: “The sales market is continuing to bounce along. But new stock entering the market is low, with too many agents chasing too few quality, saleable properties.”

In the lettings market, tenant demand continued to edge higher, with 29% of respondents reporting an increase in rental demand (up from 16% during the previous month), but only 4% of agents saw landlord instructions increase. However, 36% of agents expect rents to edge higher over the coming three months, due to rising demand for homes for rent.

Given the likely resulting supply and demand mismatch in the lettings sector, respondents predict that over the next five years rental growth will outpace that of house prices, averaging 3%, per annum (against 2% for house price inflation).

Simon Rubinsohn, RICS Chief Economist, commented: “It is interesting that over the medium term, the conclusion of the latest survey is that rental growth is likely to outpace increases in house prices. Although the Build to Rent offer is now stepping up a gear, there clearly is some doubt as to whether it can do so at a fast-enough pace to address the shortfall which may result from the more hostile environment for Buy to Let investors.”

Paul Bagust, RICS Residential Director, added: “The number of landlords exiting the market due to recent policy changes is concerning, especially given house price rises.  A functioning private rented sector is crucial to a healthy housing market and it’s predicted that over 20% of all households will be privately rented by 2020.  The sector is extremely diverse, including many one home landlords. RICS is part of a sector wide collaboration developing a revised industry-led PRS (Private Rented Sector) Code of Practice, to raise standards for both consumers and landlords, bring clarity to those already in the market on various policy measures, and encourage landlords back into a professionalised market.”

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