Short Supply Responsible For Rising House Prices

Surveyors have stated that there are a dwindling number of people who are currently putting their houses up for sale. This is thought to be contributing to the continued increase in house prices across the UK market.

The Royal Institute of Chartered Surveyors (RICS) says that the number of sellers in the country has dropped “deeper into negative territory”.

This is not mirrored in the amount of people looking to buy a house – the number of which has not changed.

The report showed that the number of homeowners that are looking to sell, has fallen in 8 out of the last 9 months.  This represents the highest rate of decrease since May 2009.

The Chief Economist for RICS said:

“It is conceivable that the decisive outcome to the election could encourage a pick-up in instructions to agents and ease some of the recent upward pressure on house prices, but it is doubtful that this will be substantive enough to provide anything more than temporary relief.”

“Alongside an increased flow of second hand stock, it is absolutely critical that the new government focuses on measures to boost the flow of new build.”

Increases to Continue

This upward trend in house prices is not expected to stop any time soon, with most surveyors predicting continued rises across the next year.

Recent information released by Halifax and Nationwide have supported these predictions.

Many people across the country are blaming this increase in prices on the housing markets failure to produce new houses – at a rate equal to the growth of the national population.

Many banks and building societies have been trying to tempt borrowers in with extremely low mortgage rates. With five year fixed rate deals being offered at as low as 2%.

Head of policy at RICS, Jeremy Blackburn, has stated that the situation regarding housing is now nearing a national crisis.

“The last time we were building 300,000 homes was in 1963 under Harold Macmillan’s Conservative government, which utilised both public and private building,” he said.

“We need a coherent and coordinated house building strategy across all tenures.”

“Introducing demand-side measures, such as extending ‘Right to Buy’, will not see the Conservatives deliver on their promise of one million homes by 2020,” he added.

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