Survey sees estate agents and housebuilders confident for the future.
House prices in the West Midlands jumped last month as rocketing interest from would-be buyers dwarfed the amount of properties coming onto the market, says October’s RICS (Royal Institution of Chartered Surveyors) Residential Market Survey.
A net balance of 50 per cent more surveyors in the region reported a rise in house prices during the month of October (up from 40 percent in September). This is the highest reading since November 2002 and demonstrates the impact that the imbalance between supply and demand is having on the market. Surveyors across the region note that while Help to Buy is boosting buyer numbers, a lack of new instructions from vendors is proving problematic.
In tandem with house price rises, 60 per cent more surveyors in the West Midlands reported an increase in new buyer enquiries last month, compared with 52 per cent back in September.
Meanwhile, with Help to Buy widening the net of those now in a position to purchase their own home and the loan to value rates on offer to buyers continuing to creep upwards, demand for rented accommodation in the West Midlands remained relatively low. A net balance of 16 per cent of respondents reported rises in interest from potential tenants during October (from 15 per cent in September).
With the market continuing to grow, the number of homes sold in the West Midlands also saw an increase last month. In the three months to October, chartered surveyors sold an average of 21 homes, the highest amount since April. Significantly, almost every region of the country saw transaction levels increase which further demonstrates that the recovery is spreading beyond the traditional economic powerhouse of London and the South East.
Looking ahead, respondents are optimistic that the improved market in the West Midlands is set to continue, with 38 per cent more surveyors anticipating further house price rises over the coming three months. Fellow of RICS, Andrew Grant of Andrew Grant LLP said: “The market is buoyant, but fuelled by a shortage of supply which is beginning to apply upward pressure on prices. Help to Buy is continuing to bring interest and confidence back to the market.”
Simon Rubinsohn, RICS Chief Economist, commented: “It’s no secret the housing market in the West Midlands is gathering some momentum and that buyer numbers are on the rise. A greater willingness by lenders to increase loan to values on mortgage products allied to the Help to Buy scheme has meant that more and more first time buyers are in a position to enter the market.
“In spite of this, the amount of homes currently up for sale in the region is still nowhere near enough to keep up with demand and – in order for the market to function correctly – this imbalance urgently needs to be addressed. Housebuilding starts have picked-up recently but we are still well behind in terms of the amount of properties needed. If we are to create a more sustainable market, it is critical that many more good quality homes are built in areas where people want to live.”