UK housing supply-demand imbalance continues

The mortgage data tell us that the level of housing transactions is growing only very slowly, despite generally supportive financial conditions and economic environment. One of the reasons seems to be a lack of supply. The RICS survey is telling us clearly that the supply of properties onto the market is not growing, despite a strong increase in the level of buyer enquiries. This supply problem likely stems from constraints in the housing construction pipeline and a lack of attractive deals for remortgaging existing properties. The RICS survey is expected to repeat this story with clear excess demand remaining which will also show up in a rising RICS price index.