UK house price growth accelerated in April because of a shortage of homes in a market boosted by the response to the Covid-19 crisis, a survey showed on Thursday.
Demand from new buyers was broadly unchanged with a net balance of +44% in April with demand positive in all regions for the first time in 2021, the Royal Institution of Chartered Surveyors said. But supply dropped sharply to -4% from +21% a month earlier.
Estate agents’ stock levels also fell with the average number of properties on their books down to 40 from 46 in December. The net balance shows the difference between positive and negative answers to RICS’ monthly survey.
As a result, a net balance of +75% of agents reported an increased in prices, up from +62%. More respondents also predicted prices would rise over the next quarter, leading to a net balance of +47%, up from +43% in March.
RICS’ survey adds to evidence of rapidly rising house prices in a market fuelled by the Chancellor’s extended stamp duty holiday and households rethinking their property needs during the pandemic. Halifax said on Monday that the average house price rose 1.4% in April from March to a record £258,204.
Sales rose but at a slower pace with a net balance of +34% reporting deals completing compared with +48% in March. RICS said the government’s plans to relax planning rules were likely to help boost supply but said quality and safety should be maintained.
Simon Rubinshohn, RICS’ chief economist, said: “Housing supply, or more pertinently, the shortfall in supply relative to demand is the key theme coming through loud and clear from respondents to the latest RICS survey. While it may be simplistic to assume that higher numbers alone can redress the affordability issue particularly in a low interest rate environment, an uplift in delivery does have a role to play.”