With fresh supply in the UK property market now outpacing demand, steep price growth should begin to taper. Coming off two years of robust demand, the recent downturn in buyer interest has been accompanied by price declines in some - but not all - regions. See the following article from Property Wire for more on this.
Supply is outstripping demand in the UK property market in the first sustained shift in the sector for two years, according to a new report.
The balance between supply and demand shifted toward the supply side as the new instructions net balance outpaced buyer interest for the second consecutive month, says the latest UK Housing Market survey from the Royal Institution of Chartered Surveyors.
New instruction and new buyer inquiries rebounded in February following a weather skewed dip in January with both net balances turning positive. For the second consecutive month the new instructions net balance outpaced the new buyer inquiries net balance, the report says.
Some 7% more chartered surveyors reported a rise than fall in new buyer inquiries compared with the previous month, up from a negative reading of 20% while a net balance of 15% of surveyors saw a rise in new instructions which compares with a negative balance of 5% in January.
Also 17% more chartered surveyors reported a rise than a fall in house prices, down from 31% in January and surveyors in the regions are still reporting house price gains in most areas although the net balances are a little less positive than they were.
The report also reveals that surveyors in the North, Yorkshire and Humberside, Wales and the West Midlands are reporting property price falls.
However, the price expectations net balance also remains in positive territory but the latest reading is the lowest since July 2009. Meanwhile, the closely watched sales to stock ratio is also beginning to edge lower which is consistent with the property market becoming a little less tight.
The newly agreed sales net balance fell for the second consecutive month but surveyors still expect sales to increase indicating that the recent drop in transactions is a reflection of recent adverse weather conditions.
‘Most market indicators are still positive and consistent with further house price increases. However the magnitude of the gains going forward is likely to continue to ease reflecting the fact that new supply coming onto the market is starting to outstrip fresh demand,’ said RICS spokesman Jeremy Leaf.
This article has been republished from Property Wire. You can also view this article at Property Wire, an international real estate news site.