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  1. ITV Report

Property market gloom as housing supply shortage becomes 'acute'

The supply of homes for sale has plunged to its lowest levels since records started 37 years ago, the Royal Institution of Chartered Surveyors (Rics) has reported.

Property prices across much of the country are on the rise again Credit: PA Wire

Hopes for a post-general election bounce in properties coming for market appear to have been misplaced, with the average stock of properties per surveyor falling to just under 52 in May, marking the lowest figure Rics has recorded since it started collecting the data in January 1978.

The "acute shortage of supply" of homes for sale is continuing to push house prices higher - and feedback from the survey suggests values are expected to increase by another 25% over the next five years, the report said.

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New property listings have been declining for four months in a row and have failed to show any meaningful growth since the end of 2013, Rics said.

On a regional basis, London and the North West of England have seen the sharpest contractions in the supply of homes for sale, while Scotland was the only area of the UK to have seen an increase in the supply of properties.

Rics said some surveyors had "expressed surprise" at the lack of a fresh supply of new properties coming onto the market after the general election. It had been thought that some potential sellers could be waiting for the outcome before putting their home on the market.

Surveyors in the North West of England, Northern Ireland, East Anglia and the South West reported the strongest price growth over the last three months.

House supply in Scotland has improved, said Rics Credit: PA Wire

Alongside this, Rics said that London house prices, which had been cooling after a particularly heated period last year, are also seeing a turnaround, with surveyors in the capital reporting prices there increasing for two months in a row, following seven months of falling prices.

Simon Rubinsohn, chief economist at Rics, said: "There had been some hope that the removal of political uncertainty would encourage more properties onto the market but the initial indications are that this is not proving to be the case.

"As a result, it is hardly surprising that prices across much of the country are continuing to be squeezed higher with property set to become ever more unaffordable.

"Indeed the feedback we are getting in the survey, which points to prices at a headline rising by another 25% over the next five years, suggests that there is no real confidence that the measures necessary to deliver a meaningful boost to new supply will be put in place any time soon."