Shortage of instructions fuels higher prices

House price growth increased again in June, pointing to renewed acceleration in house price inflation during the second half of the year.

While the average stock of homes per surveyor fell to a record low (data series began in 1978), demand edged upwards for the second successive month, despite the more cautious attitude of lenders.

One reason for the slight recovery in buyer enquiries is likely to have been a further drop in mortgage rates which is accompanying the ongoing strength of the labour market. The West Midlands and London saw the strongest increase in potential buyers during the month.

Significantly, 41% more surveyors expect house prices to rise over the next three months, which is the highest proportion since April 2014 and 36% more surveyors expect sales to increase despite the broadly flat trend in newly agreed sales.

Simon Rubinsohn, RICS Chief Economist, said:

"There had been some hope that the removal of political uncertainty following the general election would encourage more properties onto the market but the initial indications are that this is not happening. Additionally, the recent flat pattern of appraisals by respondents to the survey suggests this is not about to change anytime soon. As a result, it is hardly surprising that prices across much of the country are continuing to be squeezed higher with property set to become ever more unaffordable."