With recent market data showing a persistent rise in housing demand while supply is depleting, second steppers are up for an unpleasant surprise, Andy Sommerville, director of Search Acumen says.
The latest UK Residential Market Survey from the Royal Institution of Chartered Surveyors (RICS) reveals that new buyer enquiries have increased for the fourth straight month despite the shortage of housing inventory dropping to an all-time low.
The imbalance between demand and supply pushes house prices up and while higher property values is good news for some homeowners, those looking to move up the ladder may find they can no longer afford the next step, according to Sommerville.
Commenting on the RICS survey, he said:
“The chasm between housing supply and demand shows no sign of closing, but conveyancers will be reassured by the resounding forecast that property sales are set to gain momentum. Sentiment among surveyors clearly points to a further increase in activity, and this comes as no surprise when house price rises are lifting many homeowners out of situations where they have been trapped by negative or low equity.
“It’s certainly good news – for now – that limited supply hasn’t halted four months of rising buyer enquiries. But the problem comes when potential movers find their next step up the ladder is out of reach because prices in a higher bracket have also risen with the tide.
“This limits the number of suitable first- and second-time buyer homes coming onto the market, and the only long-term prospect for growth is for planning reform to overcome supply barriers. Until this happens, the limited stock will put a ceiling on the long-term property recovery.
“For the time being, conveyancers who want to grow their residential business will be pitted against each other to win a bigger share of the market.”
