Yorkshire house prices continue to rise due to growth in demand and lack of stock

House prices in Yorkshire and Humber continue to rise due to growing demand and contracting supply, according to the latest RICS (Royal Institution of Chartered Surveyors) UK Residential Market Survey.

Although 47% more chartered surveyors in Yorkshire and Humber saw house prices rise in July, supply to the market continued to decline with more respondents reporting a drop in new instructions.

Last month, the average number of properties for sale per surveyor in Yorkshire and Humber dropped to a record low 58. During the same time last year, surveyors in the region had 84 properties for sale on their books.

As a result, 42% of respondents in Yorkshire and Humber expect to see further house prics continue to rise over the next twelve months. Most areas of the UK are also projected to see house price growth over the coming year with confidence most elevated in East Anglia and Northern Ireland.

Despite rising prices in Yorkshire and Humber, interest from potential buyers has not diminished, as new buyer enquiries rose for the third consecutive month, with 50% of respondents reporting a rise in demand.

However, this rise in demand didn’t have a direct improvement on sales, which remained flat. But there is slight optimism about the sales activity with 39% more respondents in Yorkshire and Humber expecting sales to gain momentum over the next three months.

Jon Charters-Reid of Charters-Reid Surveyors Ltd – which operate across York, Scarborough, Harrogate, Leeds, Wetherby and surrounding areas, said: “July and August are often regarded as the ‘holiday season’ as there is a lull in activity due to the short supply of quality homes coming on to the market. Those thinking of selling should take full advantage of the fewer instructions coming to the market and the rising house prices – they may be pleasantly surprised at the response they get.”

Jeremy Blackburn, RICS Head of Policy, added: “This government has put home ownership at the very heart of its agenda, with Starter Homes and extending Right to Buy the strongest evidence of that ambition. However, this continues to be demand driven and fails to address the real issue of supply.

“A coherent and coordinated house building strategy is required across all tenures. This should include measures that will kick-start the supply-side, such as mapping brownfield, addressing planning restrictions and creating a housing observatory to assess the underlying economic and social drivers of housing and provide the impetus for solutions.

“The changes brought in through Fixing the Foundations, the Chancellor’s productivity plan, were welcome and refreshingly on the supply side – such as zonal planning, dispute resolution for S106 and local plan enforcement. But these alone are not a strategy for increasing housing supply across all tenures.”

In addition, 56% of the region’s respondents experienced a rise in tenant demand in the lettings market. But landlord instructions, despite increasing slightly, failed to keep pace once more, with 26% of respondents expect rents to increase across Yorkshire and Humber.

Simon Rubinsohn, RICS chief economist, commented: “A renewed acceleration in house price inflation allied to a fairly flat trend in sales activity highlights the very real challenges being presented by the housing market. More worrying still is the suspicion that the imbalance between supply and demand will lead to even strong price gains over the next twelve months. This is also visible in the firmer pattern in the buyer enquiries series which has now risen in Yorkshire and Humber for three months in succession, reflecting in part, a further modest easing in credit conditions.

“This trend could be brought to a halt when base rates do eventually begin to rise but the dovish tone to the latest Bank of England Inflation Report suggests the first move will come a little later than previously thought likely and that subsequent increases will be very gradual indeed.’’

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