Davis Brown are a firm of qualified chartered surveyors in the heart of London; we take great pride in having our fingers on the pulse of the latest news from the UK residential property market. As such please find below our brief summary of the Residential Market Outlook 2015 from the Royal Institution of Chartered Surveyors (RICS).
As per our last update (August/ September) the shortage of stock in the residential property market is still prevalent, with the lowest number of new instructions received in the period for three decades. This imbalance in supply and demand, continues to drive the residential house prices up. However, 68% of the nationwide surveyors interviewed, felt that the prices were at a fair or below fair value point, which would suggest that on a national scale the market still has ample room to grow. The residential property market in London was the only area to buck this trend, with 59% of those surveyed stating that properties were overvalued.
The number of agreed residential sales has grown at the fastest rate since May 2014 and is mirrored by an eighteen month high in terms of nationwide mortgage approvals. Despite these statistics the RICS has re-evaluated its transactions forecast from 1.25 m to 1.2m to take into account the lack of stock on the residential property market.
There are a number of explanations for the decline in new instructions; with the continued lack of financial stability, perhaps, being the most endemic. Another factor over the course of the year was the difficulty that many buyers had when trying to secure mortgages. The South East has seen the least number of new instructions, with many home owners opting to renovate or extend their existing properties in a bid to avoid the growing cost involved with selling and buying properties. The RICS has also put forward the interesting theory, that the stock shortage problem is self-perpetuating. In that people are opting not to put their properties up for sale, as there is a distinct lack of choice for them in terms of purchasing their next property. It would be safe to assume that is it a combination of these factors that explain the situation. To move forward and encourage new instructions, the market and economy need to offer sellers a sense of security and the ability to generate a return on their investments.
For more information about residential properties in London, contact Davis Brown – qualified chartered surveyors and estate agents in Fitzrovia.