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UK house prices to keep climbing despite drop in buyers

·Finance Reporter, Yahoo Finance UK
·2-min read
House prices An estate agent property advertisement is seen painted on a wall in London, Britain, May 15, 2019. REUTERS/Toby Melville
House prices: RICS says demand still outstrips supply despite drop in buyers. Photo: Toby Melville/Reuters

UK property surveyors expect house prices to keep rising over the next year despite a drop in new buyers because of a lack of available properties for sale.

Around 65% of professionals said they had seen an increase in house prices, according to the monthly survey by the Royal Institution of Chartered Surveyors (RICS).

This is lower than the high of 78% in April but still far above the long-term average of 13%.

Some 37% said they expected house prices to continue climbing in the next 12 months.

Read more: UK rents rise at fastest annual rate in 16 years as demand soars

The survey revealed that average sales prices for properties listed at up to £500,000 were more likely to be above the asking price,

In properties priced between £500,000 and £1m, 39% of surveyors are seeing the sales price beat the asking price. Properties listed at over £1m are typically selling just below the asking price.

However, the market is showing signs of cooling off as property professionals saw fewer new inquiries from house hunters in June.

Some 27% of professionals reported a fall in interest from potential buyers. It marked the third month in a row that interest from new buyers slipped.

RICS chief economist, Simon Rubinsohn, said: "Although buyer inquiries have predictably slipped a little of late, this needs to be placed in the context of the healthy level of demand in previous months.

"A probably even more striking aspect of the latest report is the concern being voiced about the rental market."

Read more: UK economy returns to growth in May despite cost of living crisis

Rents are also expected to rise due to the continued imbalance between supply and demand, RICS said.

Some 36% of professionals reported an increase in tenant demand, while 11% saw a fall in the number of new landlord instructions.

And 52% predicted that rents will rise over the coming three months.

Watch: Will UK house prices ever fall?

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