Property supply rises for first time in 12 months

The supply shortage may be coming to an end.

That is the view from the latest RICS Residential Market Survey.

The research among surveyors and agents found that the number of new homes listed for sale has risen for the first time in 12 months.

In March, 8% more respondents reported a rise rather than a fall in fresh listings.

New buyer enquiries also increased during March, with 9% of respondents reporting a rise rather than a drop.

This is the first time since the pandemic that the survey metrics for supply and demand have been so closely in line.

Although the small increase in the number of new listings becoming available is encouraging, the average number of properties on estate agents’ books remains close to historic lows, the report warns.

The number of agreed sales also remained flat in March.

Looking to the next three months, sales expectations remain positive with a net balance of 16% expecting a rise, up from 11% in February.

But just 2% more expect an increase rather than a fall in sales over the next 12 months.

Simon Rubinsohn, chief economist for RICS, says: “Despite mounting concerns about both the macro environment and the war in Ukraine, for now the feedback to the RICS survey shows the housing market remains resilient.

“Rising interest rates have begun to push up the cost of mortgage finance but debt servicing remains low in a historic context which helps to explain why the new buyer enquiries indicator remains in positive territory.

“Meanwhile, it is encouraging that a little more stock appears to be returning to the market. This is still early days in that inventory remains not far off historic lows but if the trend continues, it could help to create a better balance between supply and demand.

“That said, there is little evidence of this outcome materialising in the twelve-month metrics which continue to point to further increases in prices and a flatter pattern in transactions.”