RICS: House prices on the rise due to shortage of supply and increased demand.
The UK property market continues to rise.
Supply shortages bordering on steady demand has caused UK house prices to rise dramatically, says the Royal Institution of Chartered Surveyors in its latest UK residential market survey.
The survey revealed that buyer demand had been stable across the UK, but that the number of new offers was “insufficient”.
In addition, the authors write: “The survey’s main measure of house price growth increased again during the month, with a net balance of +75 percent of respondents noticing a rise in prices during April. This is up from a reading of +62 percent in March and has now become successively higher in each of the last three reports. In addition, all regions/countries in the UK are experiencing a sharp spike in house price inflation.”
UK house prices will continue to rise for a couple of months.
There were many industry-wide comments on the report. Tahir Farooqui, Canopy CEO, said: “There is a risk that the real estate market is being artificially propped up with measures like the stamp duty holiday. While higher-earners and second-tier businesses have to jump into the buying frenzy and make the most of the downsizing costs, high home prices are making homeownership even further out of reach hopeful first-time buyers. When the dust settles and support plans are phased out, securing an affordable mortgage will remain an impossible dream for many.”
Farooqui said there should be support for those trying to move from renting to buying one. One measure, he said, would be to make rental payments count toward a credit rating to help first-time buyers when it comes time to buy a property.
Others pointed out that the extension of the stamp tax is the catalyst for the current bull market. Rich Horner, MetLife’s director of individual protection, said: “The fear of missing something has put immense power in the hands of sellers, with many listings selling at inflated prices that would have been unthinkable a year ago. But the market knows that this level of activity and the growth in house prices is not sustainable, it is a question of when prices stabilize instead of whether.”
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