House prices have risen across Wales for the fifth consecutive month, according to the latest RICS UK Residential Market Survey. In October, 26% more chartered surveyors saw house prices rise rather than fall across Wales, up from a balance of 15% in September.
For the third consecutive month, prices are reported to have risen across all parts of the UK in October. East Anglia has consistently outperformed over this period and a net balance of 91% of respondents in the area reporting further growth in prices this month. In Wales, prices are predicted to continue to increase with a net balance of 17% of respondents expecting a rise in prices over the next three months. Meanwhile, at the 12 month horizon, 48% more contributors expect to see prices rise rather than fall.
Demand from potential buyers in Wales remained firm in October, with a net balance of 26% of respondents seeing a rise in new buyer enquiries. Demand continues to considerably outpace supply with a net balance of 12% of chartered surveyors reporting a fall in supply of new stock to the Welsh market, a trend witnessed throughout much of 2015.
Despite the lack of new stock coming to the market, sales activity remains firm in Wales, with a net balance of 38% of contributors reporting a rise in transactions and expectations pointing to further growth in the months to come. This chimes with HMRC transactions data, which has shown an upward trend in activity in Wales over the course of the year to date.
Tony Filice FRICS, RICS spokesperson for RICS in Wales and director of Kelvin Francis Cardiff commented: “We are seeing a reduced amount of valuations and listing and a growing number of applicants, with demand exceeding supply. This is resulting in second stepping vendors becoming more reluctant in coming to the market because of the shortage of properties to buy.
In the Welsh lettings market, demand is also continuing to outpace supply in the three months to October*. This has been the trend nationally for some time and, unsurprisingly, rental expectations remain strong with respondents expecting rents to rise over the year ahead.
Simon Rubinsohn, RICS Chief Economist, commented: “It is hard to get away from the issue of supply when it comes to the current state of the housing market in Wales and across the UK. The legacy of the drop in new build following the onset of the global financial crisis is now really hitting home with both the sales and letting markets continuing to show demand outstripping supply on a month by month basis.
“If the five year price and rent projections from members is anything to go by, property is set to become even more unaffordable going forward making the focus of boosting the delivery of new homes absolutely critical.”
*on a seasonally adjusted basis
