Too much demand for too little housing is pushing house prices up further, says the Royal Institution of Chartered Surveyors (Rics).

Its latest report, for December, shows 9% more respondents seeing a rise in new buyers while a net balance of -14% saw a drop in new listings. This metric has now read negative for the ninth month in a row.

Meanwhile, a net balance of 69% of survey respondents reported a price increase in December, and a net balance of 67% believe prices will continue to rise throughout 2022.

Agreed sales fell, with December’s reading being a net balance of -13%, but 14% of survey participants do see sales volumes increasing over the next year.

The rental market mirrored the purchase market: tenant demand grew while landlord instructions fell. A net balance of 57% respondents believe rents will rise both short- and long-term.

Rics chief economist Simon Rubinsohn says: “Despite the termination of the stamp duty break at the end of September and the more recent increase in interest rates, the Rics new buyer enquiries indicator remained in positive territory into the year end. Although respondents to the latest survey continue to highlight a lack of stock on the market, they do encouragingly still see some scope for transaction volumes to edge upwards over the coming months.

“More of a concern is the suggestion that the mismatch between demand and supply will drive house prices even higher through the course of 2022. Rents similarly seem likely to be on an upward course over the next twelve months despite broader cost of living challenges emerging on the back of higher energy costs.

“And significantly, the longer-term metrics capturing five-year expectations suggests the industry for now continues to anticipate prices and rents outpacing wage growth beyond the end of this year in the absence of a major uplift in new supply.”

Knight Frank head of UK residential research Tom Bill adds: “A supply squeeze is not the most exciting explanation for the strong house price growth seen during the pandemic but it is arguably the most important.

“Households have saved more, mortgage rates have been rock-bottom and there has been a ‘race for space’ but without such low supply and high demand, it’s doubtful we would have witnessed double-digit price growth last year.

“Supply is tentatively building so far in 2022, which may accelerate if the ending of Covid restrictions next week starts to feel permanent. Only then will price growth become less headline-grabbing.”