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Supply of homes on market ‘shows positive growth for first time in two years’

By Vicky Shaw, Press Association Personal Finance Correspondent
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Supply of homes on market ‘shows positive growth for first time in two years’

But it remains to be seen whether the uplift seen in May will lead to supply pressures easing, the Royal Institution of Chartered Surveyors has said.

The number of homes coming on to the housing market is showing signs of positive growth for first time in more than two years, surveyors have reported.

For the first time in 27 months, the overall balance of surveyors seeing the supply of new homes growing rather than shrinking has turned positive.

A net balance of 5% reported seeing the flow of properties coming to market increasing rather than falling in May.

The Royal Institution of Chartered Surveyors’ market survey also found that, while the flow of houses coming on to the market has increased marginally, average stock levels on estate agents’ books across the UK was still close to an all-time low, at just over 42 properties.

Rics said: “It therefore remains to be seen whether the increase in May truly marks the beginning of supply pressures easing.”

Looking at demand from buyers, while the number of new inquiries fell overall, the decline was modest compared with the start of the year, Rics said.

Despite the overall drop in demand from new buyers, interest from people searching for properties was reported to have increased in some parts of the UK – including London, the South West, Yorkshire and Humber, the West Midlands, Scotland and Northern Ireland.

No overall change in house prices was seen in May, but there were regional variations, with London continuing to show the most negative price trends and downwards movement in prices also seen across the wider South East.

Rics said that, notably, after nearly three years of solid price growth, momentum also appears to have slipped across the South West, as the balance of surveyors reporting prices rising rather than falling remained in negative territory in the region for the second month in a row.

By contrast, house prices continue to rise generally in the Midlands, North West, Wales, Northern Ireland and Scotland.

Rics chief economist Simon Rubinsohn said: “Although agents are suggesting that a little more supply may have come onto the market in May, some of it from the buy-to-let sector, inventory levels still remain near historic lows.

“Indeed, with the run rate on appraisals continuing to track below the numbers of a year ago, it is premature to conclude that a sustained upturn in available stock is imminent.”