A new report indicates that a drop in the number of properties coming onto the London market is having the effect of pushing up prices across the rest of the UK.
The Royal Institute of Chartered Surveyors (RICS) monthly summary shows markets in Northern Ireland and Scotland continue to outpace the rest of the UK. The market divided abruptly last month, and London was the only area in the whole country where prices were seen to be falling.
The reduced number of properties coming to market served to elevate prices in other regions, but in the capital, prices dropped for the sixth consecutive month.
However, it should be noted that the RICS suggest that this state of affairs is not likely to last long, and they confidently expect prices in London to rise by around 30% over the next five years. The monthly `snapshot’ issued by the RICS showed that 8% more property surveyors noted drops in fresh supply than had witnessed rises in the month of February. There has been a corresponding drop in new instructions – which have fallen for six of the last seven months.
There is a sense that the market is being affected by the inevitable uncertainty surrounding the forthcoming general election in May. Despite this, surveyors are still predicting that there will be a nationwide growth in house prices, to the tune of 2.4%, over the following year. This is up from 1.8% back in January.
Clear exceptions to this development include the east Midlands, the north of England and London. This indicates that the weight of political uncertainty is being experienced differently in different regions.
Bank of England data shows that mortgage approvals increased for the second consecutive month in January. The largest building society in the UK – Nationwide – noted a 0.1% dip in house prices during February, while a separate survey from rival, Halifax, indicated a drop of 0.3%.