House prices are growing overall at a national level for the first time in two years, according to the RICS UK Residential Survey for September.
The survey posted a +16% national price reading, up from a flat 0% result in August and positive for the first time since October 2022.
However, the survey did point out that some regions were seeing less of a rise – West Midlands, the South West and East Anglia.
Demand, sales, and new listings have all returned to growth.
Overall demand from buyers recorded a +14% result (net balance), the third month in a row indicating growth. Sales sentiment also saw a rise, although more marginal (+5% net balance). Near-term, a net balance of +23% of respondents believes the sales market will continue to grow over the next three months, while longer-term twelve-month growth sentiment is even stronger (+45%).
New listings rose, encouraging a growing demand, according to respondents (+22%). This is a clear rise from the previous month’s +9% result, indicating a readily available supply of property for sale. Respondents also cited potential rises in Capital Gains Tax (CGT) encouraging homeowners to list their properties for sale.
The lettings market continued to demonstrate a growing divide with demand continuing to grow and outstrip supply. September saw a +22% result for tenant demand, indicating another increase.
Meanwhile , the survey reported a further drawdown in properties listed for rent, with a -29% retreat. This trend was further influenced by some landlords listing their properties for sale before potential CGT rises.
Unfortunately for renters, the continuing squeeze on supply will likely mean further rent rises and difficulties finding property.
Commenting on the latest data RICS President Tina Paillet says: ” “The Rics survey results continue to highlight the pressures on renters, with demand consistently outstripping supply. While the Renter’s Rights Bill aims to improve standards and offer better protections for tenants, we must ensure that these reforms do not discourage responsible landlords from remaining in the market.”
She added: “Most importantly, the planned changes in the private rental sector fall short of tackling the core issue: increasing supply and making housing more affordable for tenants.”
MT Finance director Tomer Aboody says: “Although property prices are rising, we need to remember that they’re increasing against a lower benchmark from 2022 following the adverse market reaction to Liz Truss’ ill-advised Budget.”
He added: “Talking of budgets, we await to see what Rachel Reeves will deliver later this month, but very few are holding their breath for a positive outcome.”
Legal & General surveying services risk director Malcolm Webb says: “After improving sales activity in August, a modest relaxation in interest rates and the inflation rate has again provided some momentum for the mortgage market in September.
“Sentiment in the residential sector is warming up and with a 12% annual increase in the number of homes for sale, it looks like the housing market is set to enjoy a fairly strong end to the year. In the short term, the level of remortgage activity is also forecast to rise in October, creating a golden opportunity for advisers to add value.”
