The Royal Institute of Chartered Surveyors (Rics) has revised estimates it made earlier this year following accelerating prices and dwindling supplies of homes, now claiming that by the end of this year, it is likely that house price inflation will reach 6%.
ìGiven current market conditionsî Simon Rubinsohn of Rics said, ìthe latest data unsurprisingly shows house prices continuing to rise, and at an accelerated pace.î
The market conditions he speaks of are in part a combination of a strengthening jobs market and low rates on mortgages leading to an increase in demand for homes, while supplies continue to dwindle.
He went on to add that ìthere is good reason for this trend to be sustained into next year, however uncomfortable that may be for those looking to enter the market.î
Rics forecast that the highest level of growth will be seen in Northern Ireland at an estimated 11%, while the lowest increase, of only 3%, will be seen in Englandís North-East. In London, Rics adjusted their initial estimate of 0% inflation up to the new average of 6%, while their estimates for Wales remained the same, at a cool 2%.
The initial estimate from Rics at the beginning of 2015 was that over the course of the year, we would only see inflation of around 3% on house prices. This has since been revised in the wake of ever accelerating prices that led to the proportion of surveyors reporting an increase in prices in August reaching a 15 month high. 76% of the surveyors in question predict an increase in the coming year.
House prices themselves also reportedly reached a 15 month high in August of this year. Indeed banking giant Halifax reported that in the year up to August, the average price for a home in the UK went up by 9%. Halifax now report the average house price in the UK to be at £204,674.
Howard Archer, an economist at IHS Global Insight, has responded to the news by increasing his forecast for inflation of house prices up to 7% from his initial estimate of 6%.
Nationwide however, reported significantly less price growth than Halifax did, claiming that in the year up until August, prices only went up by 3.2%, not 9%; the difference here is down to methods rather than down to differing source data. It seems though, that Halifaxís estimate is more in line with the general trend and feelings among surveyors and analysts.
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