September saw another surprise house price surge as activity levels in the UK housing market continued to climb. How could this change the outlook for the months ahead?
Property in the UK continues to be in high demand with buyers and investors coming to the market in droves. A new survey from the Royal Institute of Chartered Surveyors (RICS) showed house price growth hit an 18-year high in September, with all metrics remaining strong.
The survey’s headline indicator on prices rose to a net balance of +61%, up from +44% in August. This is the percentage of industry participants reporting growing sales prices across the country. Significantly, every region in the UK has reported a rise, particularly in areas outside London.
A hive of activity
Coupled with recent house prices indices from other sources and lenders, there is overwhelming evidence of the UK housing market’s continued buoyancy. Buyers are keen to act on their goals, with a net balance of +52% of survey participants noting a surge in buyer enquiries.
New instructions from sellers are also on the rise. The RICS survey points out that this is the fourth month in a row of increased seller activity. This marks the longest stretch of growing supply levels in the sector since 2013.
“Furthermore, with a net balance of +48% of contributors reporting that appraisals are up in annual terms, the pipeline for instructions over the coming months appears to be solid,” says the report.
The number of agreed sales is also on a positive trajectory, showing interest in the market is turning into reality for most buyers and sellers. The survey found that +55% of respondents saw an increase in successful sales in September.
What’s the outlook?
The situation regarding Covid-19 and the UK’s economy is changing fairly regularly. So far, the housing market is proving resilient, but fully predicting the future is still near-impossible.
On a short-term basis, RICS survey respondents are largely optimistic. There’s a net balance of +17% who still believe that the rise in sales will continue over the next three months. House price expectations are also positive, with +23% of people expecting them to increase over this time period.
Looking to the longer term, predictions on successful sales are slightly more subdued. A net balance of -34% believe sales will continue to rise. This is largely due to uncertainty surrounding employment levels and the economic impact of ongoing lockdown outcomes.
For house prices, though, most respondents remain optimistic for the next 12 months. This is where a big regional divide comes into play. The north-west and Wales are forecast to see the strongest markets with the biggest house price rises. These are areas which had already been performing strongly as up-and-coming investment hotspots.
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