WEAK supply and demand has left the UK housing market in a “stalemate” despite a pick-up in mortgage lending, new data suggests.
Demand failed to rise in June while the recent growth in new instructions to market properties ground to a halt, according to the latest survey from the Royal Institution of Chartered Surveyors (RICS).
A net balance of just one per cent of surveyors reported a rise in new instructions (down from +14 per cent in May), while new buyer enquiries were completely flat.
“Overall activity levels barely changed in June,” RICS reported. Newly agreed sales edged up slightly with six per cent more surveyors reporting sales rose rather than fell (up from five per cent in May).
The average number of sales per surveyor came in at just 14.8, unchanged from the previous month.
“With continued uncertainty over the jobs market and the economy, this subdued picture is set to continue,” said RICS spokesperson Alan Collett.
“London, however, remains a market apart with both sales and prices showing a greater degree of resilience,” Collett added.
London was again the only region to experience rising prices, the survey said, and the only area where surveyors expect prices to increase over the next three months.
Many young people are still struggling to get onto the property ladder in the capital, with an average of 6.7 tenants competing for every rented room in London, according to the website easyroommate.co.uk.
Yet mortgage lending could be starting to pick up, the Council of Mortgage Lenders said yesterday. The number of loans for house purchase was up 1.7 per cent in May, compared to April.
There were 41,500 loans worth £5.9bn advanced for house purchase in May – still five per cent below the level in May last year, when 43,800 loans totalled £6.3bn.
“The lack of movement in the number of first-time buyer loans has put mounting pressure on an already over-loaded private rental sector,” said David Whittaker of Mortgages for Business. “Tenants are scrapping for properties and rents are climbing.”