The pace of house price growth slowed last month, as the stamp duty holiday came to an end, new data has shown.
But prices are still rising all over the country, with hefty price spikes seen in Northern Ireland, Wales and the West Midlands.
The number of homes being sold also slipped for the third consecutive month in September, the Royal Institute of Chartered Surveyors said in its closely-watched survey.
September market: Property prices are still rising everywhere in Britain, but the pace of growth slowed last month, the Rics said
Supply problems remain a serious problem, with the number of new listings still falling short in the face of high demand from buyers in the most sought-after locations.
‘The lack of stock available on the market is creating competition amongst buyers, thereby sustaining upward pressure on prices’, the survey said.
Estate agent and surveyor at Your Move for County Durham and Tyne And Wear Chris Stonock said: ‘Available stock continues to decline and with it buyer choice.
‘Frenetic interest has subsided but there are still enough buyers around to make it a sellers’ market. There has been no substantial uplift in new listings in September which is not a good sign given the very low stock levels.’
Experts surveyed said they think property prices hikes will slow over the next few months.
But, most also believe that prices will rise further in the longer term over the year to come, as fewer homes and rental properties come on to the market.
Predictions: Property price predictions from the Rics today
Troublesome: A shortage of properties being listed for sale remains a serious problem
Fluctuations: A chart from the Rics showing house price fluctuations since 1995
Simon Rubinsohn, chief economist at the Rics, said ‘Both price and rent expectations are close to series highs pointing to greater pressure on affordability at a time when money markets are sensing interest rate increases coming sooner rather than later.’
Throughout the pandemic, the housing market has been kept buoyant by the stamp duty holiday, cheap mortgage deals and high buyer demand in the past year.
A growing number of City insiders think the Bank of England could tweak interest rates up from the record low of 0.1 per cent by the end of the year, which would hit swathes of mortgage-holders.
What happened in September?
The Rics said there was a ‘steadier’ trend in buyer demand in the housing market last month, following a brief pull-back in the wake of the flurry of activity seen prior to the phasing out of the stamp duty holiday.
Nationally, the new buyer enquiries indicator posted a net balance of zero in September. This is up from -13 per cent the previous month and is ‘indicative of a generally stable demand backdrop’, the Rics said.
While the number of homes being sold nationally slowed last month, completed transaction levels remained high in the North East of England and Wales.
The number of homes coming up for sale remained low last month, which is having the effect of triggering competition among buyers and pushing up prices further.
The pace of property price growth did ease in September, but remains ‘elevated in a historical context’, the Rics said.
Every part of the country continue to exhibit strong house price inflation, with Northern Ireland, Wales and the West Midlands all seeing ‘exceptionally firm rates.’
Halifax reported last week that prices in September were 7.4 per cent up on the year, including a hefty 1.7 per cent monthly jump, the biggest since 2007.
Tomer Aboody, director of property lender MT Finance, said: ‘The stamp duty holiday may have finally ended but a combination of low interest rates and a lack of stock on the market means house prices continue to rise, now and for the foreseeable.
‘In particular, houses with outside space are doing well, giving buyers room to work from home and the living conditions they need in this post-pandemic world.’
Looking ahead, Rics said: ‘Going forward, near term price expectations remain positive, as a net balance of +21% of contributors anticipate an increase over the coming three months (net balance was +23% in August).
‘For the next twelve months, a balance of +70% of respondents foresee further price growth, with expectations firmly in expansionary territory right across the UK.’
Some links in this article may be affiliate links. If you click on them we may earn a small commission. That helps us fund This Is Money, and keep it free to use. We do not write articles to promote products. We do not allow any commercial relationship to affect our editorial independence.