While 33% more surveyors saw prices rise in April, the highest reading since last summer, new instructions slipped to a net balance of -21%, the eighth consecutive drop in the last nine months. Moreover, the flow of second hand stock onto the market dropped in most parts of the country.
Alongside this, for the first time since August 2014, respondents reported an increase in prices in every area of the UK due to the shift in tone in the London market, where 28% more respondents saw prices rise (compared with 6% more surveyors in March who saw house prices fall).
Near term member expectations for prices and sales continue to point to relatively modest gains, but 72% of members expect prices to rise over the course of the next twelve months.
Jeremy Blackburn, RICS Head of UK Policy, said: "It is conceivable that the decisive outcome to the election could encourage a pick-up in instructions to agents and ease some of the recent upward pressure on house prices, but it is doubtful that this will be substantive enough to provide anything more than temporary relief. Alongside an increased flow of second hand stock, it is absolutely critical that the new government focuses on measures to boost the flow of new build.
The affordability and availability of homes in the UK is now a national emergency and addressing this crisis must be the priority for the new government. The last time we were building 300,000 homes was in 1963 under Harold Macmillan’s Conservative government, which utilised both public and private building.
We need a coherent and coordinated house building strategy across all tenures. This should include measures that will kick-start a supply-side revolution, such as mapping brownfield, addressing planning restrictions and creating a housing observatory to assess the underlying economic and social drivers of housing and provide the impetus for solutions.
Introducing demand-side measures such as extending Right to Buy will not see the Conservatives deliver on their promise of 1m homes by 2020."
Andy Sommerville, Director of Search Acumen, comments: “Few people will have been surprised to see a fall in new instructions during April ahead of the election, which was billed as the least certain and most closely contested in years. The decisive Tory win was a vote for continuity and will help to restore optimism to the housing market, as well as increasing the chances that transactions will pick up in May and beyond.
An all-blue cabinet could accelerate decision making, so we can count on the continuation of flagship policies like Help to Buy, the arrival of the new ISA and the return of Right to Buy. The government is rightly championing home ownership, but it would be a mistake to hope that more demand-side measures will be enough to address an acute housing shortage.
RICS’ data shows eight consecutive monthly drops in new instructions, which cannot be blamed on election uncertainty. The latest rise in prices reported by surveyors remains a concern and the supply crisis is still high up the list of pressing issues that the new government must address.”
Ed Goodworth, real estate partner at BDO, said: "The rise in prices in April is likely to be start of another period where values increase - we're already seeing a significant surge in activity on the back of last week's election results, particularly at the top end of the market. But now that we have a government in place, housebuilders will be waiting to see if manifesto pledges to build more homes will actually pay off."
