The latest market report from RICS has announced a further increase in house price growth in June – reaching an 11-month peak.
According the report, buyer demand has increased in all parts of the UK, except the South East, despite the continued fall in market supply to its lowest since RICS began collecting data (1978).
41% more surveyors have said they expect to see a rise in house prices over the next three months and 36% more surveyors believe that sales will continue to increase, despite the broadly flat trend in newly agreed sales.
The report’s analysis of the rental sector concludes there is likely to be no signs of a material increase, despite the on-going battle with supply and demand, resulting in continued upward pressure on rental prices.
Simon Rubinsohn, RICS chief economist, said: “Although much of the discussion about supply shortages has focused on the owner occupier market, the survey demonstrates in no uncertain terms that the issue, at least at a headline level, is just as visible in the rental sector. This is most clearly reflected in both the house price and rental projections over the medium term which comfortably exceeds the likely growth in wages.”
Jeremy Blackburn, RICS head of policy, noted that the government has its sights set on a long-term project to drive owner occupation and property owning but the survey shows that it is not just in this area where there is a marked shortfall in supply.
Cuts announced in the recent Budget will also drive more people out of the private rented sector towards social housing, undoubtedly having a detrimental effect on local councils and housing associations as Right To Buy Scheme is also extended.