Property shortage is ‘dire’, RICS admits

Prospective home buyers have returned to the market following the Brexit vote – only to find there is very little out there.

The RICS this morning described the property drought as “dire”, and a leading estate agent predicted that after the shock result of the US presidential election, things can only deteriorate.

As Donald Trump himself forecast, his election would be “Brexit, plus, plus, plus”.

The RICS report this morning, which covers October and was compiled well before the results of the election were known, said house hunters are returning to the market following the June Brexit referendum.

Home buyer demand has increased for the second consecutive month, said the RICS. Across the country, more of its agency members reported a rise in home buyer interest.

However, they also reported that the number of properties on the market dropped, continuing a two-year trend.

While prices have risen at a national level, central London respondents to the RICS survey report the eighth consecutive monthly drop in prices.

According to the RICS, the national rise in prices has been fuelled by a continued fall in the number of new properties on the market.

Respondents everywhere reported a further decline in new instructions over the month.

Simon Rubinsohn, RICS chief economist, said: “The dire shortage of available housing across the UK is continuing to push prices upwards, regardless of the uncertainty linked to the ongoing discussions surrounding Brexit.

“We are only weeks away from the Autumn Statement, and it will be interesting to see what measures – if any – the Chancellor will put in place to increase housing supply and create a more affordable market.”

The RICS also reported that agreed sales rose marginally across the UK.

In the lettings market, tenant demand picked up firmly in the three months to October with 29% more surveyors reporting a rise in enquiries, rather than a fall.

Demand continues to outpace new supply in all areas apart from London, where for the second consecutive quarter, demand – and rents – fell.

Separately, north London estate agent Jeremy Leaf yesterday warned of a likely deterioration in the housing market, caused by fresh uncertainty in the wake of Trump’s election.

Leaf, a former UK housing spokesperson for the RICS, said: “We are likely to see a further period of uncertainty because he [Trump] will not be able to take any decisive action until he assumes power in mid-January.

“At the very least it looks like we will have fewer transactions, tighter lending criteria, less housebuilding and higher rents – which is exactly the opposite of what we’re looking for at the moment.”

However, some agents a few miles away in central London are anticipating doing deals with wealthy Americans looking to get out of the States, and also with Middle Eastern buyers who, until yesterday’s shock result, had been planning to purchase property in the US.

Property buying agencies are also hoping to cash in.


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Written by: Houseladder