UK housing market sees first rise in sales listings in 12 months

London

THE number of new homes listed for sale in Britain rose in March for the first time in 12 months, potentially taking some of the heat out of a surge in house prices, a survey showed on Thursday (Apr 14).

The Royal Institution of Chartered Surveyors (RICS) said a net balance of +8 per cent of its members reported a rise in the volume of fresh listings.

The balance for new buyer demand was +9 per cent, making March the closest the market has come to balance between trends in supply and demand since the pandemic began.

RICS said +74 per cent of its members reported a rise in house prices last month, easing off from February's revised +78 per cent. A Reuters poll of economists had pointed to a reading of +75 per cent.

Other measures of house prices have shown double-digit percentage rises over the past 12 months as the shift in demand towards larger homes away from city centres, triggered by the pandemic lockdowns, continued.

RICS chief economist Simon Rubinsohn said the housing market remained resilient despite concerns about the rising cost of living, including higher interest rates, and the war in Ukraine.

"It is encouraging that a little more stock appears to be returning to the market," he said. "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."

Although the Bank of England has raised borrowing costs 3 times since December to tackle high inflation - and looks set to do so again on May 5 - financing costs are low by historic standards, bolstering demand from buyers, Rubinsohn said.

Meanwhile, UK asking prices for rental homes surged at a record pace as demand from tenants outstripped the supply of properties on the market.

Rightmove Plc said the average price landlords sought rose 10.8 per cent from a year ago in the first quarter and by 1.8 per cent from the previous 3 months. With a 6 per cent increase in tenant demand and a 50 per cent drop in available properties, the online property portal said the rental market was the most competitive it had ever seen.

Higher living costs will further squeeze British consumers, who already face inflation that has reached a 30-year high.

"We're hearing from agents and landlords that tenants are signing longer leases, which has prevented some of the stock that would normally come back onto the market," Tim Bannister, Rightmove's director of property data, said in a statement released on Thursday.

"When it comes to demand, we're still seeing the effects of the pandemic, whereby tenants are balancing what they need from a home and how close they need to live to work with where they can afford."

Across the United Kingdom, average landlord yields stayed flat from a year ago but were highest in Scotland at 6.7 per cent in the first quarter. Swansea and Wales saw the biggest annual rise in asking rents. REUTERS, BLOOMBERG