House prices on the rise in East Midlands

HOUSE prices in the East Midlands continue to grow despite a mixed picture for the UK market as a whole.

A fifth more respondents in the RICS UK Residential Market Survey for August reported rising rather than falling prices, at the headline level.

Price expectations for the coming three months remain positive for the region, as well as for the next 12 months.

August saw new buyer enquiries continuing to grow for the second consecutive month, following a nine month run of negative readings, though agreed sales remain flat.

A modest drop in prices is also being reported in the South East, the North and East Anglia, with slid growth reported for Northern Ireland and the South West.

A majority of 61 per cent nationwide felt more landlords would exit the market over the coming year, and just 12 per cent felt there would be a greater number of entrants.

Tenant demand continued to rise, though new landlord instructions remained flat, with respondents predicting that rental growth will outpace house prices over the next five years, averaging three per cent each year.

Simon Rubinsohn, chief economist for RICS, said: “It is interesting that over the medium term, the conclusion of the latest survey is that rental growth is likely to outpace increases house prices.

“Although the Build to Rent offer is now stepping up a gear, there clearly is some doubt as to whether it can do so at a fast enough pace to address the shortfall which may result from the more hostile environment for Buy to Let investors.”

Paul Bagust, RICS Global Property Director, added: “The number of landlords exiting the market due to recent policy changes is concerning, especially given house price rises.

“A functioning private rented sector is crucial to a healthy housing market and it’s predicted that over 20 per cent of all households will be PRS (private rented sector) by 2020.” in