Lack of supply fuelling house price rises

Not enough houses are coming onto the market for sale and this is fuelling price increases due to an imbalance in supply and demand, according to the Royal Institution for Chartered Surveyors (RICS).

New instructions from vendors continued to fall in March as the predicted ‘spring bounce’ failed to materialise, a situation that was reflected in most parts of the UK.

Significantly, the increase in activity continues to be accompanied by rising house prices. During March, 57% more surveyors across the country saw prices rise rather than fall.

Looking ahead, with no indication that the imbalance between buyer demand and homes on the market is going to change any time soon, surveyors expected prices to continue to increase as we enter the summer months.

Simon Rubinsohn, RICS Chief Economist, said: "It is a major concern that we are not seeing enough houses coming onto the market. For the market to operate effectively, we desperately need more homes in areas where people want to buy and want to live. Until this happens we’re likely to see prices to continue to increase and it is going to be ever harder for many first time buyers to conceive of ever owning their own home."