Number of properties on market at all-time low

Report says that the lack of homes for sale is causing a 'vicious cycle'

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The supply of homes for sale has fallen to a record low, squeezing house prices higher, the Royal Institution of Chartered Surveyors (Rics) has reported.

The shortage of properties on the market worsened in July to its lowest levels since records started in 1978, with about 47 properties for sale per surveyor. Rics said that a lack of homes for sale is causing a “vicious cycle”, whereby the limited choice on offer is in turn discouraging would-be movers from putting their homes on the market.

Average stock levels have fallen by a fifth since January and the widespread decline has recently been particularly sharp in East Anglia, according to Rics.

It said all areas of the UK are projected to see sizeable house price gains over the next 12 months, with confidence most elevated in East Anglia and Northern Ireland.

Demand is rising at the fastest pace seen since February 2014, Rics said. Despite the growing demand, the number of new sales agreed has remained unchanged, suggesting the supply shortage is preventing transaction levels from rising.