‘Britain to see 25% rise in house prices’
House prices in the UK are expected to increase by 25% in the next five years amid a shortage of homes and high demand, according to a leading property body has warned.
The Royal Institute of Chartered Surveyors (Rics) said supply of homes for sale is now at a record low as the expected post-general election “supply bounce” failed to blossom. The data shows the average stock of houses per surveyor has decreased by 12% since the start of the year while new buyer inquiries hit its fastest rate in over a year, causing a surge in house prices.
While building societies, Halifax and Nationwide identified the average price of a UK home at £195,000-£196,000, Martin Ellis, the housing economist at Halifax warned that housing supply “remains extremely tight”. He added: “The imbalance between supply and demand is likely to continue to push up house prices over the coming months.”
Chief economist at Rics, Simon Rubinsohn said: “There had been some hope that the removal of political uncertainty would encourage more properties on to 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.”
He added that the feedback Rics was receiving from its members “points to prices at a headline level rising by another 25% over the next five years” and suggested confidence towards the government providing a boost in supply is scarce.
A chartered surveyor in Surrey, told Rics: “Listings are in very short supply, which is pushing up asking prices to unrealistic levels in some cases.”
The property body pointed to the fact that this situation could lead to a 3% rise in the average rent price over the next 12 months, stating contributors to their survey “anticipate that rents will rise across all parts of the UK over the next three months, with expectations most elevated in the East Midlands and the south-west”.
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