Neil Foster, agent at Foster Maddison Property Consultants, said in the latest Royal Institution of Chartered Surveyors (RICS) UK residential survey: “On the current trajectory, the sales market could cease to exist by the spring.
“Vendors are not coming to market at anything near average levels and the stock of available homes continues to shrink month-by-month.”
The level of new housing supply coming to market remained in negative territory for the sixth month running with a score of -35 per cent in September, flat on -36 per cent in August.
Also pointing to constrained supply, respondents said the number of appraisals carried out by estate agencies in September was below the rate seen last year. On a monthly basis, this also slipped to -26 per cent from -10 per cent.
Scores are based on responses from chartered surveyors and estate agents with positive readings representing a rise in activity while negative readings indicate a decline.
Buyer demand steady
Buyer demand could squeeze supply issues further, as activity returned in September following a brief decline after the phasing out of the stamp duty holiday.
New buyer enquiries posted a net balance reading of zero, up from -13 per cent in August.
Amid the lack of available properties, newly-agreed sales reported a negative reading for the third consecutive month. In September, a net balance of -15 per cent of respondents cited a drop in newly-agreed sales. This was a slight improvement on the -17 per cent of respondents who reported a fall in August.
House price pressure
The lack of stock is expected to continue supporting house price growth with a positive reading of 68 per cent of respondents seeing increases during the month.
Going forward, 21 per cent of respondents forecast prices will rise in the near term while 70 per cent expect increases over the next 12 months.
Sarah Coles, personal finance analyst at Hargreaves Lansdown, said: “A property drought is forcing up house prices, and rents, leaving house-hunters and renters out in the cold. The number of properties up for sale continued to fall in September, and the number of appraisals was down too.
“Sellers can’t see anything on the market to buy, so don’t want to sell, creating a vicious circle that is causing a property drought. This is the sixth successive month of fewer properties coming to the market, so house-hunters have nowhere to go, and sales are falling.”
She added: “One agent said that if we continue on this path, we won’t have a sales market at all by the spring. Popular properties are still creating bidding wars, which is pushing prices up, but not at the rate of the peak this spring, and the agents say some of the panic buying has come out of the market.
“It means buyers have the worst of all worlds, because they can’t find a property they want to live in, and if they settle for second-best, they’ll have to pay through the nose for it.”