The housing market saw a third month of consecutive falls in the number of new homes coming onto the market, according to the Royal Institution of Chartered Surveyors.
Surveyors reported a decrease in new property listings, with the net balance standing at -34% in June, an additional deterioration from -24% reported in May.
In May, the gap between the supply of new property listings and demand from buyers was its widest for more than seven years.
The rate of new enquiries last month eased – with the net balance of respondents seeing an increase in June easing to +14%, down from +43% back in April.
The survey says: “This is happening across all regions of the UK, coinciding with the stamp duty holiday beginning to taper off.”
This month, the nil-rate stamp duty threshold was be reduced from £500,000 to £250,000 until the end of September.
From 1 October, the threshold will return to £125,000 – or £300,000 for first-time buyers purchasing a property worth up to £500,000.
However, house prices continue to spike as demand increases while supply falters, with a net balance of +83% of respondents reporting an increase, the survey says.
The report adds, prices in Yorkshire & the Humber, Northern Ireland and Wales saw the highest rises, but says, “all parts of the UK continued to report robust increases in house prices”.
It says a net balance of +56% respondents anticipate prices will continue to rise over the next twelve months across the country.
In the rental market, tenant demand lifted in June, with a net balance of +60% noting a rise, up from +48% in May. By contrast, the shortfall in new landlord instructions intensified further, as a net balance of -32% said they had seen a decline.
Respondents forecast rents will edge up, with projections suggesting +3% over the coming twelve months – including London, which has seen a turnaround from negative rental assessments earlier in the year.
Rics chief economist Simon Rubinsohn says: “Respondents to the latest Rics survey are pretty unanimous in once again highlighting the challenge around supply whether in the sales or rental markets.
“Reflecting this, the feedback is consistent with further increases in both prices and rents over the coming year.
“While the role the credit channel and the extended period of ultra-low interest rates can’t be ignored, it is critical the government is able to create the conditions to support higher levels of new build development to address the worsening affordability challenge.”
Hargreaves Lansdown personal finance analyst Sarah Coles says: “Panic buyers have been clearing the shelves at the estate agents again.
“The number of new properties for sale fell for the third month running, so although buyers have come to the market more slowly, there are still plenty of them to ensure any promising new property is snapped up overnight.
“It means buyers are getting sucked into a race to make an offer, then a bidding war, and even after they secure a property, they run a bigger risk of being gazumped.
“It’s a vicious circle, because potential sellers can’t see anything they want to buy at the moment, so they don’t list.
“It means anyone who might have wanted to buy their home doesn’t have anything to buy so they don’t list either, and so on.
“A shortage of properties, and record-low mortgage rates are likely to underpin the market for a while to come.
“However, the pace of sales seems likely to slow as the stamp duty holiday comes to an end in September.
“Agents are erring on the side of caution, expecting a flat market in the next three months and fewer sales in the next 12 months.
“Whether this brings about a slowing of price rises, a flattening, or something more dramatic, depends on what happens in the broader economy.
“A very strong economic recovery raises the possibility of inflation and potential interest rate rises, which could hit the property market.
“On the flip side, new variants or a rise in hospitalisations that forces a return to lockdowns and closure of businesses, could damage the recovery and force job losses, which would also hit property.
“The property market flourishes in a goldilocks economy, and there are no guarantees of this as we go further through the year.”
MT Finance director Tomer Aboody adds: “Values for desirable homes in particular will continue to rise in the near future while the government continues to support the market but more importantly while money is cheap to borrow.
“The government needs to assist sellers in putting properties on the market, and this could be by reforming the stamp duty for downsizers.”
Former Rics residential chairman, and a north London estate agent, Jeremy Leaf says: “The market paused in June as many buyers and sellers realised they just would not be able to take advantage of the stamp duty concession before it tapered off.
“The frenzy of April and May was replaced by an opportunity for many to try to take advantage of the increased balance in supply and demand, and give themselves a better chance of moving.
“Unfortunately, supply is still not increasing fast enough, despite the faster vaccination rollout.
“Nevertheless, we don’t expect a significant correction in prices, more of a softening at least for the next few months as confidence in the economy seems to be more of a priority than worries over the ending of the furlough scheme.”
