Housing demand push prices higher

House prices jumped have jumped again as demand from potential purchasers out-strips supply.
The RICS Residential Market Survey showed the majority of surveyors reporting price rises hit an 11-year high.

The net balance of surveyors reporting rises jumped to 57%, the highest reading since June 2002, highlighting the impact that the imbalance between supply and demand is having on the market.

However, there is still concern that concern that housing building supply is failing to keep pace with spiking demand and could fuel dangerous levels of inflation.

Surveyors across the country warned that while Help to Buy was boosting buyer numbers, a lack of new instructions from vendors was worrying.

In the three months to October, chartered surveyors sold an average of 20.3 homes, the highest amount since February 2008.

Almost every region of the country reported a rise in transactions showing the recovery is spreading beyond London and the South East.

Simon Rubinsohn, RICS Chief Economist, said:”It’s no secret the housing market is gathering some momentum and that buyer numbers are on the rise right across the country.

“A greater willingness by lenders to increase loan to values on mortgage products allied to the Help to Buy scheme has meant that more and more first time buyers are in a position to enter the market.

“In spite of this, the amount of homes currently up for sale is still nowhere near enough to keep up with demand and – in order for the market to function correctly – this imbalance urgently needs to be addressed.

“Housebuilding starts have picked-up recently but we are still well behind in terms of the amount of properties needed.

If we are to create a more sustainable market, it is critical that many more good quality homes are built in areas where people want to live.”

About Fiona Russell-Horne

Group Managing Editor across the BMJ portfolio.

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