House prices expected to increase in spring as demand lifts, surveyors say

House price inflation appears to be gathering pace amid growing demand from buyers, according to surveyors.

A net balance of 20% of property professionals saw an uplift rather than a fall in housing market inquiries in February, the Royal Institution of Chartered Surveyors (RICS) said.

It marked the third month in a row when demand has increased, with growth being seen across virtually all parts of the UK over the month, the report found.

But RICS said that while near-term sales expectations are positive, optimism has moderated somewhat, with anecdotal evidence suggesting concerns over the economic impact of coronavirus are weighing on the outlook to some extent.

Meanwhile, a net balance of 29% of surveyors reported house price increases in February, up from a balance of 18% the previous month.

While there was growth in all regions of the UK, London, Yorkshire and the Humber and East Anglia all saw the strongest upturns.

Furthermore, a net balance of 22% of surveyors expect house prices to increase further over the spring.

There are also signs that the supply of homes coming to market is increasing.

The number of new homes coming onto the market nudged up for a third month in a row, with West Midlands and the South East of England seeing the biggest bump in new properties coming onto the market.

Simon Rubinsohn, RICS chief economist, said: “It is encouraging that the results of the latest survey continue to show a positive trend both in terms of potential buyer interest and new instructions to agents. Indeed, this is the first time since 2014 that new supply to the market on the RICS indicator has increased for three consecutive months.

“Inventory levels are still at historically low levels despite this but the firmer trend in appraisals suggests that the picture could improve over the coming months providing the coronavirus doesn’t become more of an inhibitor of activity in the sector.

“For now, at least, feedback around expectations are consistent with activity levels continuing to strengthen albeit relatively modestly.”