The pace of house price growth slowed last month as the stamp duty holiday drew to a close, new data shows.
But prices are still rising across the country, with price spikes in Northern Ireland, Wales and the West Midlands.
Home sales also fell for the third straight month in September, the Royal Institute of Chartered Surveyors said in a close survey.
Market in September: Property prices still rising all over the UK, but the pace of growth slowed last month, according to the Rics
Supply issues remain a serious problem, with new listings still falling short due to high demand from buyers in the most desirable locations.
“The lack of available supplies in the market creates competition among buyers, pushing prices upwards,” the study said.
Realtor and surveyor at Your Move for County Durham and Tyne And Wear Chris Stonock said: ‘Available inventory continues to decrease and with it buyer’s choice.
“The frenetic interest has abated, but there are still enough buyers to turn it into a seller’s market. There was no substantial increase in new listings in September, which is not a good sign given the very low inventory levels.’
Experts surveyed said they think the rise in real estate prices will slow down in the coming months.
But most also think that prices will continue to rise in the longer term in the coming year, as fewer homes and rental properties come onto the market.
Forecasts: Real Estate Price Predictions from the Rics Today
Difficult: a shortage of homes for sale remains a serious problem
Fluctuations: A chart from the Rics showing house price fluctuations since 1995
Simon Rubinsohn, chief economist at the Rics, said: “Both price and rent expectations are close to series highs, pointing to greater pressure on affordability at a time when money markets feel interest rate hikes coming sooner rather than later.”
Throughout the pandemic, the housing market has been booming over the past year due to the stamp-duty holiday, cheap mortgage deals and high demand from buyers.
A growing number of City insiders think the Bank of England could raise interest rates from a record low of 0.1 percent by the end of the year, hitting a large proportion of mortgage holders.
What happened in September?
The Rics said there was a ‘more stable’ trend in buyer demand in the housing market last month, following a brief slump in the wake of the flurry of activity ahead of the phasing out of the stamp duty holiday.
Nationally, the new buyer surveys indicator posted a net balance of zero in September. This is up -13 percent from a month earlier and is “indicative of generally stable demand,” according to the Rics.
While the number of homes sold nationwide slowed last month, the number of completed transactions remained high in north-east England and Wales.
The number of homes for sale has remained low over the past month, leading to competition among buyers and pushing prices up further.
The pace of property price growth slowed in September but remains “high in a historical context,” de Rics said.
Every part of the country continues to show strong house price inflation, with Northern Ireland, Wales and the West Midlands all seeing ‘exceptionally robust rates’.
Halifax reported last week that prices in September were 7.4 percent higher than in the year, including a sizable increase of 1.7 percent per month, the largest since 2007.
Tomer Aboody, director of real estate loan company MT Finance, said: ‘The stamp duty holiday may finally be over, but a combination of low interest rates and a lack of inventory in the market means that house prices will continue to rise, now and for the foreseeable future.
“Homes with outdoor space are especially doing well, giving buyers the space to work from home and the living conditions they need in this post-pandemic world.”
Looking ahead, Rics said: ‘Going forward, near-term price expectations remain positive as a net balance of +21% of contributors expects an increase in the next three months (net balance was +23% in August).
“Over the next twelve months, a balance of +70% of respondents foresee further price growth, with expectations firmly in expansionary territory across the UK.”
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