UK house prices to rise faster than anticipated
The Royal Institution of Chartered Surveyors (RICS) yesterday upped its UK house price growth forecast for 2015 to six percent from three percent, arguing that the acute supply deficit is set to grow.
“Given current market conditions, the latest data unsurprisingly show house prices continuing to rise, and at an accelerating pace,” said Simon Rubinsohn, chief economist at RICS. “There is good reason for this trend to be sustained into next year, however uncomfortable that may be for those looking to enter the market.”
The RICS said that housing stock registered with estate agents is at its lowest level in over 30 years, while the monthly house-price index set a 15-month high in August.
The bullish picture is supported by a recent report from mortgage lender Halifax, which said that house prices surged 2.7 percent last month – the highest increase in more than a year.
“The shortage of secondhand properties for sale on the market is resulting in upward pressure on house prices,” Martin Ellis, a housing economist at Halifax said as quoted by Bloomberg. “Strengthening demand and highly constrained supply are likely to mean that house-price growth continues to be robust in the short term.”
On an annual basis, house prices have risen nine percent to an average of £204,674, according to Halifax. This compares with annual consumer-price inflation of a mere 0.1 percent.
Soaring demand and poor housing supply has also given a major boost to the earnings of housebuilders across the UK. Persimmon posted 31 percent rise.