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House prices 'look set to rise faster than wages'


06-09-2017

 

Property surveyors find demand and sales are all down, but anticipate the housing market picking up during the next 12 months.

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Image: Fewer homes are being put up for sale, say property surveyors

House prices look set to rise faster than wages despite weak transaction levels, according to property surveyors.

The Royal Institution of Chartered Surveyors (RICS) said the overwhelming majority of its members expected prices to rise across Britain by around 3.5% each year during the next five years, despite signs that the market has become more subdued recently.

"Perhaps the most ominous signal emanating from the data... is that contributors still expect house prices to increase at a faster pace than wages over the medium term despite the difficulty many first time buyers are clearly having in taking their first steps onto the property ladder," RICS chief economist Simon Rubinsohn said.

RICS said demand, new instructions and sales all fell in May, with price growth easing too.

Fewer homes were put up for sale and the average number of properties on estate agents' books was just 43, it said.

Surveyors reported the biggest slide in listings since the wake of the Brexit vote last year.

RICS said a "sheer lack of supply continues to support prices for the time being".

It said "little change" was expected in the market during the next three months, but there was slightly more optimism looking ahead to the next 12 months with surveyors anticipating sales to increase.

Earlier this week, Halifax said there had been "virtually no change" in house prices over the last three months, though house prices rose by 0.4% in May for the first time in five months to reach £220,706 on average across the UK.

Contrasting figures from rival lender Nationwide earlier this month showed house prices had fallen for three consecutive months for the first time since 2009.

Last week, the Bank of England showed mortgage approvals for home buyers fell to a seven-month low in April, in a further sign that the housing market may be slowing.

The National Association of Estate Agents said buyers and sellers were taking a "wait and see" approach.

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