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UK surveyors report fastest prices rises since May 2014
[LONDON] British property valuers doubled their forecast for house price gains this year after reporting the most widespread price increases since a mini-boom in the early part of 2014.
The Royal Institution of Chartered Surveyors said on Thursday it now expected British house prices to rise by 6 percent this year, compared with an earlier forecast of 3 percent and a 10 percent rise recorded in 2014.
a shortage of homes on the market helped push the RICS monthly house price balance to +53 in August from +44 in July, well above all forecasts in a Reuters poll and the highest level since May 2014. "There is good reason for this trend to be sustained into next year, however uncomfortable that may be for those looking to enter the market," RICS chief economist Simon Rubinsohn said.
"So many of our members are telling us that they are struggling to replace the stock they have sold," he added.
British house prices were rising at a double-digit rate in the middle of last year, before tighter mortgage regulation took some of the steam out of the market.
But with construction failing to keep pace with a growing population, house prices are still rising much faster than wages and the cost of other goods and services.
Official figures for June showed that British house prices were 5.7 per cent higher than a year earlier, while mortgage lender Halifax reported prices in the three months to July were 7.9 per cent higher than a year earlier.
Halifax is due to publish August data at 0700 GMT on Thursday.
RICS said prices rose fastest in Northern Ireland, where the market was particularly hard hit by a slump in prices in the Irish Republic after the 2008 financial crisis.
Across the United Kingdom as a whole, RICS said stock levels were the lowest in more than 30 years, creating a vicious circle as existing home-owners were unwilling to move because of the lack of choice for their next home.
Britain's government has created subsidies for the purchase of newly built homes and slightly eased planning requirements, but RICS has previously said these measures alone will not lead to enough construction of new housing.