Supply drought goes on - but more appraisals reported by agents

The Royal Institution of Chartered Surveyors says its monthly sentiment measure of house prices is at its highest level since 1988.

A rush by home-buyers to beat the main stamp duty holiday deadline, plus the ongoing shortage of properties on the market, are the main drivers. 

The RICS index - which reflects the proportion of surveyors reporting price increases - rose for a fourth month to +83 from +76 in April.

"With the economy performing better than could have been expected even a short while ago and the cost of money still at rock bottom levels, the principal drivers supporting demand will remain in place even after the expiry of the stamp duty holiday" says RICS chief economist Simon Rubinsohn.

"More challenging is the question of supply, a theme coming back strongly from respondents to the survey” continues Rubinsohn, who claims the current mismatch between new buyer enquires and properties coming to the market is the worst for almost eight years. 

However, there might be light at the end of the tunnel for the supply shortage.

The RICS report says: “In terms of the pipeline for fresh listings going forward, survey participants are reporting that the number of market appraisals being undertaken is up on a twelve month comparison [a net balance of 24 per cent], which could translate into an improved number of sales instructions in due course.”