[LONDON] British house prices look set to become less affordable over the next three months after a decisive result at last month's election failed to trigger an expected return of sellers to the market, property valuers said on Thursday.
The Royal Institution of Chartered Surveyors said its monthly index - which measures members' expectations for house prices over the next three months - rose to +34 in May from +32 in April, broadly in line with economists' forecasts.
This takes the index to its highest level since August 2014, when property prices were just starting to cool after reaching double-digit rates of growth earlier in 2014.
RICS said the number of people looking to buy a house rose sharply in May. But the same was not true of people wanting to sell houses, despite an unexpected victory for Prime Minister David Cameron's Conservatives over the opposition Labour Party, which had planned higher taxes on luxury homes. "As a result, it is hardly surprising that prices across much of the country are continuing to be squeezed higher with property set to become ever more unaffordable," RICS chief economist, Simon Rubinsohn, said.
The number of properties on sale per surveyor was now its lowest since the survey started in 1978, RICS said, and prices were likely to rise by a quarter over the next five years.
Mr Cameron has pledged to increase the number of homes being built, but recent government measures have boosted demand for housing rather than construction "There is no real confidence that the measures necessary to deliver a meaningful boost to new supply will be put in place anytime soon," Mr Rubinsohn said.