Record level of residential property sales predicted for South West10th December 2013

As 2014 approaches, predictions for the rate of increase in future residential property sales across the South West have hit a new record high, with 91 per cent of surveyors saying they expect sales levels to increase. **

Price expectations for the region are also rising with a ten-year high recorded during November as the amount of homes coming onto the market, once again, fell well short of rapidly rising buyer demand.

In the South West, 45 per cent more chartered surveyors predict prices to continue their upward trend rather than fall back over the coming three months. This is the highest reading since September 2003 and demonstrates the impact that the recovery in demand allied with anaemic supply is having on the housing market.

Prices remained high last month, as a net balance of 38 per cent more respondents in the region reported price growth. Significantly, each region of the United Kingdom saw prices rise for the second successive month. While there are still some areas of the UK that are struggling, it appears that, on the whole, the regional markets are now responding to the incentives provided by the government and better economic news.

Although a lack of stock on the market remains a big challenge, the number of property transactions is also growing in the South West. During the three months to November, the average number of homes sold per chartered surveyor* was 21. This is the highest figure since November 2007.

Roger Punch, RICS Residential Spokesperson for the South West, said: “The recovery in the South West housing market continues with the sales expectations for the next three months reaching a new record level, in some parts of the region, showing continued confidence in the market with house prices also expected to rise again.

“The increased confidence and various initiatives are continuing to encourage people into the market, although the delivery of low cost housing as supply remains an issue. This increase in people looking to buy, rather than rent continues to be reflected in the South West rental market with both tenant demand and new landlord instructions falling.

“Once we are into the New Year, we expect a return to strong activity and sellers will continue to benefit from professional advice not only regarding pricing regarding their particular locality, but also in the management of their sale in a potentially changing market.”

Simon Rubinsohn, RICS Chief Economist, said: “It’s no secret that the housing market is on the way up and prices are surging ahead in many parts of the country. The Bank of England’s recent decision to withdraw the Funding for Lending scheme – which allows banks to borrow more cheaply and pass the benefits on to mortgage applicants – could well have some impact on the number of people able to purchase a home. Although the improvement in wholesale and retail funding markets may mean the impact on mortgages is relatively limited.

“One thing we are very concerned about, however, is the lack of both new and existing homes coming on to the market. As the Chancellor pointed out last week, housebuilding is on the up, but it is rising nowhere near quickly enough to make up the shortfall that has built up in recent years. If there is not meaningful increase in new homes, the likelihood is that prices, and for that matter rents, will continue to push upwards making the cost of shelter ever more unaffordable.” 

*Sales per surveyor recorded per branch (three month rolling average)
**Sales expectations series dates back to October 1998