Thursday 13 May 2021 7:19 am

UK house price growth accelerates as supply of new homes coming to market dwindles

UK house price growth accelerated last month due to a slowdown in the supply of new homes coming to market, according to the latest research. 

A survey carried out by the Royal Institution of Chartered Surveyors (Rics) showed that 75 per cent of respondents reported an increase in UK house prices.

The figure is up from 62 per cent in March, and is the highest growth seen over the last three months. 

More respondents also predicted prices continuing to rise over the next quarter, with 47 per cent saying they would compared to 43 per cent in the previous month.

In total, 68 per cent said UK house prices will continue their upward trajectory over the next 12 months.

The increase is being driven by a lack of new homes coming to market, while buyer demand remains strong.

Respondents to the survey said the number of new instructions from owners looking to sell up eased significantly, with the latest net balance of minus four per cent marking a sharp drop from 21 per cent in the previous month.

The average number of properties on estate agents’ books now stands at 40, compared to 46 in December last year.

Meanwhile, 44 per cent of respondents saw enquiries from new buyers pick up in April, nearly unchanged from 43 per cent in the previous month. 

Simon Rubinsohn, Rics chief economist, said: “Housing supply, or more pertinently, the shortfall in supply relative to demand is the key theme coming through loud and clear from respondents to the latest Rics survey. 

“While it may be simplistic to assume that higher numbers alone can redress the affordability issue particularly in a low interest rate environment, an uplift in delivery does have a role to play.”