House price growth turns positive for first time in two years surveyors

House prices are rising across the UK generally for the first time in two years as the market continues to pick up, surveyors have reported.

A balance of 16% of professionals reported prices increasing in September, up from a flat 0% result in August and the first positive reading since October 2022.

Demand, sales, and new listings all grew in September, the Royal Institution of Chartered Surveyors (Rics) said.

A net balance of 14% of property professionals saw demand from buyers rise rather than fall in September.

An overall balance of 5% saw sales increase rather than decrease, with a balance of 23% expecting further rises in the next three months and 45% predicting an increase over the next 12 months.

A balance of 22% of professionals reported a rise in new listings.

The report also noted that speculation over a potential increase in capital gains tax was cited as encouraging some people to list their properties for sale.

Rics head of market analytics Tarrant Parsons said: “The latest survey results once again convey a brighter picture for housing market activity, with the recent easing in mortgage interest rates continuing to support a recovery in buyer demand.

“Critical for the outlook, a further unwinding in monetary policy is anticipated over the months ahead, which should create a more favourable backdrop for the market moving forward.

“In keeping with this idea, forward-looking sentiment data from the survey points to sales volumes gaining impetus, both in the near term and over the next 12 months.”

In the lettings market, demand continues to outstrip supply, Rics said. Professionals reported the supply of properties shrinking, while tenant demand increased.

This trend is further influenced by some landlords listing their properties for sale before potential capital gains tax rises, Rics said.

Rics president Tina Paillet said: “Rics survey results continue to highlight the pressures on renters, with demand consistently outstripping supply.

“While the Renters’ Rights Bill aims to improve standards and offer better protections for tenants, we must ensure that these reforms do not discourage responsible landlords from remaining in the market.”

The findings were released as property website Zoopla said the average UK home now costs around £300 per square foot.

Hartlepool has the lowest cost per square foot at £118 and Kensington and Chelsea in London the most expensive, at £1,373, Zoopla calculated.

Izabella Lubowiecka, senior property researcher at Zoopla, said: “A property that comes with an extra bedroom or bathroom might still not have right amount of additional space the buyer is looking for. Examining the square footage of a property can help buyers to identify if a property has that space and if the cost per square foot is worth it.”

Here is the average cost of a home per square foot, according to Zoopla (Northern Ireland was not included by Zoopla in its regional breakdown):

North East, £145

Scotland, £175

Wales, £200

North West, £205

Yorkshire and the Humber, £205

East Midlands, £225

West Midlands, £240

South West, £295

East of England, £330

South East, £375

London, £585

Published: 10/10/2024 by Radio NewsHub