Shortage of Yorkshire and the Humber homes pushes price up

The housing market in Yorkshire and the Humber has experienced a boost in the number of homes hitting the market for sale, according to the latest monthly RICS UK Residential Market Survey.

However, the increase of demand from buy-to-let investor is rising at a quicker rate, therefore house prices are also being pushed higher.

Chartered surveyors in Yorkshire and Humber reported an average of 56 homes on their books in January, up from 52 in December. However during the same time period two years ago (January 2014) chartered surveyors in Yorkshire and Humber had an average of 84 homes on their books.

Survey respondents in Yorkshire and Humber also reported strong levels of new buyer enquiries last month, with 16% more respondents seeing an increase in demand for homes to buy. This is most likely due to a rush of buy-to-let investors looking to buy before the 3% Stamp Duty surcharge comes into effect in April.

As activity in the housing market gathers pace overall, agreed sales in Yorkshire and Humber remain solid, with chartered surveyors in the region selling an average of 22 homes each over the last three months (November-January).

Chartered surveyors in other parts of the UK did not sell as many homes, with respondents in both the North East and West Midlands selling an average of 19 homes each, whilst those in the South East and East Anglia sold an average of 16 homes each over the same time period.

In addition, chartered surveyors in London sold the least number of homes over the past three months, selling an average of 10 homes each. Chartered surveyors in the East Midlands sold the most throughout November-January, selling an average of 31 homes each.

As for the future, house prices in Yorkshire and Humber are projected to rise, with 38% of the region’s chartered surveyors expecting to see prices increase in the more popular areas, over the next twelve months.

In the lettings market, 48% of chartered surveyors reported a rise in tenant demand last month, up from 39% the previous month. At the same time, landlord instructions increased during January with 13% more respondents in Yorkshire and Humber seeing a rise in rental properties coming on to the market (up from 9% the previous month). However, supply is failing to keep pace with growing demand and as a result, expectations point to continued rental growth.

Ian Briggs FRICS of Dacre, Son & Hartley estate agents, said: “The buy-to-let rush has excluded first time buyers from the market as sellers inevitably prefer to sell to investors who are able to secure funding upon very relaxed lending criteria.”

Alex Mcneil of Bramleys estate agents commented: “Stock levels are now at their lowest since 2006 and falling month by month, with there now being an acute shortage of new properties to the market. However, for the time being, sales volumes are being maintained.”

RICS Chief Economist, Simon Rubinsohn concluded: “The rise in new instructions in January, although modest, is very welcome. However with buy to let investors rushing to get into the market ahead of the stamp duty hike, the near term pressure on prices is if anything intensifying despite a higher level of supply.

“How the tax changes planned for the buy to let sector over the next few years play out remains to be seen but there are concerns raised in the survey that some existing landlords will look to either gradually scale back on their portfolios or exit the market altogether as the more penal regime begins to bite. Against this backdrop, it is perhaps not surprising that the key RICS indicators points to further rent (as well as house price) increases.”