Landmark News

LANDMARK COMMENT ON SEPTEMBER RICS REPORT - LACK OF SUPPLY PUSHING UP PRICES IN SOUTH WEST

13 OCTOBER 2009

A lack of supply is still underpinning the house price recovery in the South West says the RICS UK housing market survey published today (13 October 2009). Significantly, the headline RICS national house price balance recorded the highest figure since the onset of the credit crunch.

The net balance of Chartered Surveyors across the UK reporting rises rather than falls in house prices reached 21.5 in September, up from 9.9 percent in August – this is the highest result since May 2007 when the net balance was 25 percent.

The South of England is leading the upturn in prices and here in the South West the net balance of surveyors reporting prices rises increased by 6 percentage points in one month, up to 29 percent from 23 percent in August. Elsewhere, the picture is less rosy with Wales and Yorkshire and Humberside registering negative net balances of 15 and 18 percent.

Last month’s optimism that vendors were starting to return to the market has proved a little premature. A net balance of only 4 percent of surveyors nationally reported that new instructions had increased in September, compared to a reading of 12 percent in August. While here in the South West this figure fell to a negative 2 percent from a positive 9 percent in August. Correspondingly, the average number of unsold properties on surveyors’ books remained unchanged at 64.

Meanwhile, transaction levels continued to improve in September with sales per surveyor in the region rising to 18 over the past three months, which equals the national average. As a result, the closely watched sales to stock ratio – a measure of market slack and a lead indicator of future prices – edged upwards a little further. It has now risen for nine consecutive months and stands at 29, its highest level since December 2007.

The pace of improvement in buyer interest slowed for the third consecutive month. The net balance of surveyors nationally reporting an increase rather than a decrease in new buyer enquiries slipped from 47 percent in August to 36 percent in September. The number of surveyors reporting a rise in new buyer enquires in the South West increased slightly last month, up to 56 percent from 51 percent in August.

Tim Maggs, from Maggs & Allen and RICS South West spokesperson, comments:

“A lack of supply is still underpinning the rise in house prices with new instructions to estate agents continuing to dwindle.  Meanwhile, despite the problems first-time buyers are continuing to encounter in securing finance, the level of enquiries from potential purchasers remains strong. This imbalance between demand and supply suggests that house prices will move higher in the near term.”

Notes for editors:

The RICS question on measuring house price changes is as follows:
“Indicate by how much average house prices have changed over the last three months.” (Answers either being – falling, the same or rising)

RICS housing market survey is the longest running monthly survey of house prices in the UK, collecting data since January 1978.  The survey is cited by the Bank of England's monetary policy committee at its monthly interest rate setting meetings.


About RICS
RICS is the world’s leading qualification when it comes to professional standards in land, property and construction. In a world where more and more people, governments, banks and commercial organisations demand greater certainty of professional standards and ethics, attaining RICS status is the recognised mark of property professionalism.

Over 100 000 property professionals working in the major established and emerging economies of the world have already recognised the importance of securing RICS status by becoming members.

RICS is an independent professional body originally established in the UK by Royal Charter. Since 1868, RICS has been committed to setting and upholding the highest standards of excellence and integrity – providing impartial, authoritative advice on key issues affecting businesses and society. RICS is a regulator of both its individual members and firms enabling it to maintain the highest standards and providing the basis for unparalleled client confidence in the sector.