[LONDON] British house price growth accelerated in October, fueled once again by a shortage of new homes coming to the market, a body representing property valuers said on Thursday.
The Royal Institution of Chartered Surveyors (RICS) said its monthly house price balance rose to +49 from +44 in September, topping a Reuters poll consensus of +45 and not far off August's 15-month high of +53.
All parts of the country reported rising prices, while new instructions coming to the market decreased for a ninth month in a row, RICS said. "The legacy of the drop in new build following the onset of the global financial crisis is now really hitting home, with both the sales and letting markets continuing to show demand outstripping supply on a month by month basis," Simon Rubinsohn, RICS chief economist, said.
Property is set to become more unaffordable going forward, based on five-year projections from RICS' members for house prices and rent, he added.
Respondents expect house prices to rise by just under 4.5 per cent per year over the next five years, the survey showed.
Other surveys have also pointed to renewed pressure house prices after a slowdown through most of last year which was caused by the introduction of tougher checks on borrowers by mortgage lenders.
House prices in the three months to October rose 9.7 per cent on the year, according to mortgage lender Halifax last week.
The Bank of England has said it would seek to dampen the housing market if necessary regulatory tools first before raising interest rates.
BoE Deputy Governor Jon Cunliffe said on Tuesday that Britain's credit cycle is entering a more normal phase after the financial crisis and there may be a case for moving earlier rather than later to help moderate credit growth.