UK house prices to rise due to supply shortage, surveyors say

London

UK house prices are likely to surge further in the next year because of a shortage of new properties coming onto the market, an industry survey showed.

The figures from the Royal Institution of Chartered Surveyors (RICS) suggest that the expiration of a tax break on purchases will do little to slow what's been a red-hot market. It's one of the signals that inflation is picking up across the UK and starting to alarm policy makers at the Bank of England.

RICS said that the number of estate agents seeing new properties come to market in July fell to its lowest since April 2020. A balance of 66 per cent of respondents to the survey expected prices to rise in the next year, up 10 points from June. Areas far from city centres benefited most.

"Buyers are continuing to place a premium on space with the prospect of a hybrid model of work being adopted by many organisations," said Simon Rubinsohn, chief economist at RICS. A net balance of 79 per cent of property appraisers saw an increase in prices in July, just shy of the 82 per cent reading the month before.

Separate data from Rightmove showed that buyers continued the "rush for room", opting for homes with gardens and more space rather than flats, as pandemic lockdowns forced millions of office staff to work remotely.

The average asking price of apartments has climbed about one per cent since the start of the pandemic while detached houses rose 10 per cent.

"Flats were temporarily out of favour as people sought bigger homes with more space further out, but we're starting to see that trend start to shift back," said Tim Bannister, director of property data at Rightmove.

The number of agreed sales of flats rose 14 per cent in June and July from the year before and were 24 per cent higher than the same months in 2019. BLOOMBERG