House price growth turns positive for first time in two years – surveyors
House prices are rising across the UK generally for the first time in two years as the market continues to pick up, surveyors have reported.
A balance of 16% of professionals reported prices increasing in September, up from a flat 0% result in August and the first positive reading since October 2022.
Demand, sales, and new listings all grew in September, the Royal Institution of Chartered Surveyors (Rics) said.
A net balance of 14% of property professionals saw demand from buyers rise rather than fall in September.
Sales
An overall balance of 5% saw sales increase rather than decrease, with a balance of 23% expecting further rises in the next three months and 45% predicting an increase over the next 12 months.
A balance of 22% of professionals reported a rise in new listings.
The report also noted that speculation over a potential increase in capital gains tax was cited as encouraging some people to list their properties for sale.
Rics head of market analytics Tarrant Parsons said: “The latest survey results once again convey a brighter picture for housing market activity, with the recent easing in mortgage interest rates continuing to support a recovery in buyer demand.
“Critical for the outlook, a further unwinding in monetary policy is anticipated over the months ahead, which should create a more favourable backdrop for the market moving forward.
“In keeping with this idea, forward-looking sentiment data from the survey points to sales volumes gaining impetus, both in the near term and over the next 12 months.”
Lettings
In the lettings market, demand continues to outstrip supply, Rics said. Professionals reported the supply of properties shrinking, while tenant demand increased.
This trend is further influenced by some landlords listing their properties for sale before potential capital gains tax rises, Rics said.
Rics president Tina Paillet said: “Rics survey results continue to highlight the pressures on renters, with demand consistently outstripping supply.
“While the Renters’ Rights Bill aims to improve standards and offer better protections for tenants, we must ensure that these reforms do not discourage responsible landlords from remaining in the market.”
The findings were released as property website Zoopla said the average UK home now costs around £300 per square foot.
Hartlepool has the lowest cost per square foot at £118 and Kensington and Chelsea in London the most expensive, at £1,373, Zoopla calculated.
Izabella Lubowiecka, senior property researcher at Zoopla, said: “A property that comes with an extra bedroom or bathroom might still not have right amount of additional space the buyer is looking for. Examining the square footage of a property can help buyers to identify if a property has that space and if the cost per square foot is worth it.”
Here is the average cost of a home per square foot, according to Zoopla (Northern Ireland was not included by Zoopla in its regional breakdown):
North East, £145
Scotland, £175
Wales, £200
North West, £205
Yorkshire and the Humber, £205
East Midlands, £225
West Midlands, £240
South West, £295
East of England, £330
South East, £375
London, £585
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How can an increase in house prices ever be good news. They are already completely out of sync with wages.
They are in sync with the wages now required to pay the few ready to work building houses. Brexit has sent many overseas workers home and too many here want to stay at home instead of work. So simple supply/demand economics kicks in.
Part of the problem is that building trades are still working to old style practices whereas the really progressive players are moving into onsite assembly of units fabricated off site. There will still be a need for plumbers, electricians and finishing trades but there are productivity gains that UK builders are slow to adopt. I don’t share your view that too many here want to stay at home. I know a lot of tradesmen in my area and they are busy men although much of their time is spent on property improvement and upgrades. Part of the price the wider… Read more »
The entire UK is fixated about house prices and see escalation as a “good thing”. In reality we need a shift away from this “property is wealth” focus to “a house is a home”. At same time an easing of interest rates is needed. If interest rates need to stay at 5 – 6% then perhaps we should revisit the old tax relief system where say the interest on the first 100k of a loan is allowable for relief.