Lack of stock is continuing to drive house price growth, the RICS reported this morning.
Also this morning, the LSL/Acadata house price index for England and Wales reported a new record in house prices, saying the average for November was £290,640 – up 6% on a year ago and 0.6% higher than October.
In London, the average house price is just shy of £600,000, at £598,173.
The LSL survey also said that home sales fell 15% in November compared with October, with completed sales for the year 3.4% behind the same point in 2014.
Meanwhile, the RICS said that although growth in buyer demand has moderated, new instructions have continued to fall for the tenth consecutive month.
Level of inventory on estate agents’ books slipped to a new low in November, said the RICS.
Comments from participating surveyors included:
“Very limited number of properties available and coming on to the market. Agreed sales are being aborted as vendors unable to find properties to buy” (East Anglia);
“The dearth of instructions is severe . . . This has led to a significant fall in the number of sales” (south east);
“Remarkable levels of sales still being achieved but very few new instructions. The result is a worrying shortage of stock” (west midlands);
“Supply continues to be limited.” (north); and
“Stock is still extremely low and agents are fighting for instructions. As a result, fees are suffering” (Yorkshire & Humberside).
Comments (2)
Why are instruction levels so low?
Good question & here are my answers (most of them are probably wrong but I challenge anyone to come up with a more likely reason.
A1: Cheap interest rates means there is no financial pressure to keep up mortgage repayments- repossessions are down at the moment.
A2: Job insecurity is pretty high in most business sectors, know anyone on a zero hour contract?
A3: Old people are living longer than ever before
A4: The trade up price is just to big to jump, particularly in the south east and if you want to stay close to where you are now.
A5: The traditional highs and lows of the property market are changing. It used to be Spring and Autumn. Spring yes still but Autumn???
A6: Equity: have houses prices risen enough in the last 5 years to give a second time buyer enough equity to make the leg up? Not out here in country maybe in London I don’t know.
A7: BTL market have been absorbing vast numbers of property over the last 20 + years and are holding on to them or selling the entire portfolio, (like the maths teachers) to a corporate to continue letting them out.
A8: Know any vendors that want to move but cant see anything they want to buy and nothing on the horizon either?
Finally
A9: It’s Xmas – who moves at Xmas time ?
No great surprise there really but it would be nice to have some idea why the instruction levels are so low. Are people waiting for more increases or is the climate wrong.