Appraisal numbers up - could supply shortage soon be over?

The shortage of supply compared to demand, which has characterised the housing market in recent months, could soon be a thing of the past.

The Royal Institution of Chartered Surveyors - which measures market sentiment from members - says a strong majority have seen an increase in new buyer activity during the past month. This is a net balance of +42 per cent of respondents, the highest such figure since last September.

And a net balance of +29 per cent of members who responded say they saw an increase in appraisals; this is a dramatic turnaround from the minus 19 per cent recorded as recently as February, and according to RICS the switch suggests new instructions are in the pipeline and are likely to change the market landscape over the late spring and summer.

Meanwhile in its look back at the March market, RICS says the stamp duty holiday extension helped agents sell more properties than during the previous month. It says the more relaxed timetable of the extension lasting until late September and the successful roll out of the vaccine suggests a more optimistic summer than many expected.

Simon Rubinsohn, RICS chief economist, says: "The results from the latest RICS survey show that the decision of the Chancellor to extend the stamp duty break and then taper its expiry has had an immediate impact on the housing market with all the key activity indicators rebounding in March." 

Rubinsohn adds that a worsening imbalance between supply and demand had raised the pressure on house prices, with a net +60 per cent of survey respondents expecting prices to rise over the next 12 months despite that likely busier pipeline this summer.