House prices in the UK are predicted to continue to rise in 2014, according to the Royal Institution of Chartered Surveyors (RICS), which released its UK Residential Market Survey on Monday.
The independent, representative professional body said that the amount of homes coming onto the UK market in November this year did not meet increasing buyer demand. A further 59% of chartered surveyors predicted that prices will continue an upward trend, rather than drop back over the coming three months. This is said to be the highest reading since September 1999, which indicates that the higher demand and lower supply is having an impact on the housing market.
According to the RICS, house prices picked up sharply in November 2013, with a net balance of 58% more respondents reporting price growth, up from 57% in October. Each region in the UK reportedly saw property prices rise for the second successive month. Some areas of the UK that are struggling, however the results of the RICS survey show that regional markets are now responding to government incentives and positive economic news.
Despite the lack of housing stock for sale, the number of property transactions is increasing and during the three months to November, the average number of homes sold per chartered surveyor amounted to 20.6, compared to the same period in 2012 when the survey respondents were selling just 15.9. The RICS added that a net balance of 76% of surveyors expect sales levels to increase in 2014.
Simon Rubinsohn, RICS Chief Economist, stated: “It’s no secret that the housing market is on the way up and prices are surging ahead in many parts of the country. The Bank of England’s recent decision to withdraw the Funding for Lending scheme – which allows banks to borrow more cheaply and pass the benefits on to mortgage applicants – could well have some impact on the number of people able to purchase a home. Although the improvement in wholesale and retail funding markets may mean the impact on mortgages is relatively limited.
“One thing we are very concerned about, however, is the lack of both new and existing homes coming on to the market. As the Chancellor pointed out last week, housebuilding is on the up, but it is rising nowhere near quickly enough to make up the shortfall that has built up in recent years. If there is not meaningful increase in new homes, the likelihood is that prices, and for that matter rents, will continue to push upwards making the cost of shelter ever more unaffordable.”
The RICS regulates property professionals and surveyors in the UK and other sovereign nations. Its members are Chartered Surveyors and are entitled to use MRICS after their names. The organisation also provides education and training standards, protects consumers with strict codes of practice and advises governments and business, as well as providing expertise in matters involving fixed assets, including but not limited to land and real property.