Supply and demand imbalance continues

New buyer enquiries in June increased to +38, the highest level since August 2009, whilst sales to stock ratio edged down.

According to the June RICS Residential Market Survey rising demand is at least partly due to increased availability of credit.

The relatively small amounts of stock coming onto the market, has resulted in this increased interest not being translated fully to activity.

Since the beginning of the year, the RICS survey has been measuring average perceived loan-to-value ratios and house price expectations at the 1 and 5 year horizons.

The results show that mortgage availability is gradually improving with average LTVs for first-time buyers, existing owners and buy-to-let landlords all increasing in recent months.

House price expectations have also picked up sharply with respondents expecting a 1.5% increase during the next 12 months.

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