Expectations for future house price growth in the UK hit a more than fourteen-year high during November, as the amount of homes coming onto the nation’s market, once again, fell well short of rapidly rising demand.
In the latest RICS index, 59 per cent more chartered surveyors across the country predict prices to continue their upward trend rather than fall back over the coming three months. This is the highest reading since September 1999 and demonstrates the impact that the recovery in demand allied with sluggish supply is having on the housing market.
Meanwhile, November also saw prices pick up sharply, with each region of the UK seeing prices rise for the second successive month. While there are still some areas of the country that are struggling, it appears that, on the whole, the regional markets are now responding to the incentives provided by the government and better economic news.
Simon Rubinsohn, RICS Chief Economist, commented: “It’s no secret that the housing market is on the way up and prices are surging ahead in many parts of the country. The Bank of England’s recent decision to withdraw the Funding for Lending scheme – which allows banks to borrow more cheaply and pass the benefits on to mortgage applicants – could well have some impact on the number of people able to purchase a home. Although the improvement in wholesale and retail funding markets may mean the impact on mortgages is relatively limited.
“One thing we are very concerned about, however, is the lack of both new and existing homes coming on to the market. As the Chancellor pointed out last week, house-building is on the up, but it is rising nowhere near quickly enough to make up the shortfall that has built up in recent years. If there is not meaningful increase in new homes, the likelihood is that prices, and for that matter rents, will continue to push upwards making the cost of shelter ever more unaffordable.”