Supply outstrips demand in housing market
The number of people putting their house up for sale is currently outnumbering the number of buyers, according to the latest figures from the Royal Institute of Chartered Surveyors (RICS).
The RICS UK Housing Market survey showed that for the third month in a row there were more new instructions than new buyer enquiries.
Surveyors report that political uncertainty is pushing sellers to market their property before the impending general election.
House prices are rising in London, the South East and Scotland but, according to surveyors, prices are falling in East Anglia, Yorkshire and Humberside, the North and the West Midlands.
RICS spokesperson Ian Perry says: "With the general election approaching and uncertainty growing over the political direction of the country, many vendors who were previously inclined to sit on the sidelines now appear eager to put their properties on the market.
“For the time being, many of the key housing market indicators are still positive or stable. However, with stocks increasing and sales decreasing we may see some modest price falls in some regions although London, the South East and Scotland are continuing to perform well," he says.
Matt Hutchinson, director of research at flat and house-share website spareroom.co.uk, says a lack of new properties coming onto the market has been one of the primary reasons why many buyers have not been able to purchase in the past 12 months.
“Although the general election effect is good news in the short term for buyers who are in a position to buy immediately, the very real prospect of a hung Parliament is likely to have a detrimental effect on the housing market post 6 May, with every likelihood that sellers will retreat for the hills until the political uncertainty is resolved," he says.
Meanwhile, the Council of Mortgage Lenders reported that the number of loans advanced for house purchase increased by 12% in February.
However, January was extremely weak due to one-off factors such as the effect of the end of the stamp-duty exemption in December 2009 and the severe winter weather.
So the 35,000 loans advanced (worth £5 billion) signifies a modest recovery, although they were up by 49% in volume and by 67% in value from a year earlier.