November saw house prices continue to rise as British property valuers reported a record shortage of homes for sale, according to the latest research from the Royal Institution of Chartered Surveyors (RICS).
Some members of the organisation believe that incentives for first time buyers could lead to more sales in the coming months.
House Prices Continue to Rise as Lack of Homes to Sell Hits Record High
LSL Property Services and Acadata also released their house price index for England and Wales today, reporting a new record high in house prices. The study found that the average property value in November was £290,640, a 6% increase on last year and 0.6% up on October.
The report also says that home sales dropped by 15% in November compared to October, with completed sales for the past 12 months sitting 3.4% behind the same period in 2014.
The RICS found that high demand for homes is not leading to greater supply, as the number of homes for sale per surveyor has continued to decrease for the tenth consecutive month to a new record low.
Chief Economist at the RICS, Simon Rubinsohn, says: “I can’t recall a set of comments which have so frequently drawn attention to lack of stock on the market. Given this, it is hard not to envisage prices continuing to climb upwards.”
Official data shows that house prices rose by 6.1% in the year to September and last week, Halifax predicted that they could rise by as much in 2016. Read more: /house-price-forecast-for-2016/
House prices have risen more slowly in London, where the RICS reports the rate of growth has slowed for a fourth consecutive month, as last year’s increase in Stamp Duty for properties worth more than £925,000 cools the top end of the market.
Most economists agree that Britain’s property market is suffering from a long-term lack of house building, particularly in the south of England, fuelled by planning constraints and a shortage of skills and finance.
In his Autumn Statement, Chancellor George Osborne revealed that he will support builders in selling 200,000 new homes at 20% below market value over the next five years.
First time buyers in the capital will get access to larger Government-funded loans and loans will also be offered to those buying a shared ownership property.
The RICS says that this has led to its members predicting the greatest increase in sales in over two years. Initially, it believes this will lead to higher prices, not a rise in construction.
Rubinsohn adds: “With the best will in the world, it is likely that the boost to demand will come through rather more rapidly than the expansion of the development pipeline.”1