South West residential property market continues to gain strength15th November 2013

In the South West residential sales expectations for the next three months hit an all time high with 86 per cent more chartered surveyors predicting a rise rather than fall in sales figures over the next three months, according to the Royal Institution of Chartered Surveyors October Residential Market Survey.

The number of homes sold in the last month also remained high in the South West. In the three months to October, Chartered Surveyors sold an average of 20 homes*, the highest amount since February 2008. Significantly, almost every region of the country saw transaction levels increase, which further demonstrates that the recovery is spreading beyond the traditional economic powerhouse of London and the South East.

Although the level of new instructions remains reasonable in the South West compared to some parts of the UK, with 26 per cent of chartered surveyors seeing a rise in new instructions rather than a fall, supply remains a problem with 62 per cent of chartered surveyors seeing a rise rather than fall in new buyer enquiries. The imbalance between supply and demand is continuing to push prices up in the region with 42 per cent of chartered surveyors in the South West reporting a rise rather than fall in house prices in the last month.

Meanwhile, with Help to Buy widening the net of those now in a position to purchase their own home, demand for rented accommodation is decreasing with both tenant demand and landlord instructions in the South West dropping. This has pushed the rental prices upwards with 46 per cent of chartered surveyors expecting an increase in rental prices over the next three months – the highest reported sentiment since records began in April 1999.

Roger Punch, RICS Residential Spokesperson for the South West, said: “We are seeing the recovery in the South West housing market continue. The sales expectations for the next three months are at record levels, in some parts of the region, showing continued confidence in the market with house prices also expected to rise. Some sellers appear to be waiting for the New Year before embarking on selling, presumably with the expectation of gaining higher prices, which in turn is currently adding to the shortage in supply.

“The various initiatives are continuing to encourage people into the market and the government needs to support the delivery of low cost housing as supply remains an issue. This increase in people looking to buy, rather than rent is now also beginning to be reflected in the South West rental market.”

Simon Rubinsohn, RICS Chief Economist, said: “It’s no secret the housing market is gathering some momentum and that buyer numbers are on the rise right across the country. A greater willingness by lenders to increase loan to values on mortgage products allied to the Help to Buy scheme has meant that more and more first time buyers are in a position to enter the market. .

“In spite of this, the amount of homes currently up for sale is still nowhere near enough to keep up with demand and – in order for the market to function correctly – this imbalance urgently needs to be addressed. Housebuilding starts have picked-up recently but we are still well behind in terms of the amount of properties needed. If we are to create a more sustainable market, it is critical that many more good quality homes are built in areas where people want to live."