House prices increased in March due to demand outpacing supply, according to findings from the latest RICS Residential Market Survey.

RICS revealed that more home sales were agreed in March and suggested this was aided by the Chancellor’s decision to extend the stamp duty holiday.

A net balance of +42% of respondents cited an increase in new buyer enquiries during March, which was up from the 0% reading from the previous month and the strongest return since September last year.

While the pace of the rise in new instructions didn’t match the rate of demand growth, leading to an increase in prices, a net balance of +29% of surveyors reported that appraisals were up on the same period last year. RICS suggested this could mean more new instructions will come onto the market in the coming months.

Agreed sales also rose sharply in March, with a net balance of +50% of contributors reporting an increase – the strongest reading since August last year.

With demand continuing to outstrip supply, RICS also said it is “unsurprising” that prices have increased across the country, with a net balance of +59% of respondents citing a rise since February’s survey was published.

“The results from the latest RICS survey show that the decision of the Chancellor to extend the stamp duty break and then taper its expiry has had an immediate impact on the housing market with all the key activity indictors rebounding in March,” commented RICS chief economist, Simon Rubinsohn.

“However the headline numbers as well as the anecdotal remarks from respondents clearly demonstrate that across much of the market, demand is outstripping supply and that as a result, prices continue to move upwards. More worryingly, this is also being reflected in the price expectations data both at the 12 months horizon and beyond.”

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