Monday 20 November 2017

UK house price growth expectations hit 14-year high in Nov - RICS

A sign is seen outside some newly built apartments in Berkhampstead, southern England August 13, 2013. REUTERS/Eddie Keogh
A sign is seen outside some newly built apartments in Berkhampstead, southern England August 13, 2013. REUTERS/Eddie Keogh

Expectations of future rises in British house prices hit a 14-year high in November, according to a monthly survey by a property surveyors group which warned that too few homes were going on the market to meet demand.

The Royal Institution of Chartered Surveyors (RICS) said on Tuesday that 59pc of surveyors forecast prices would rise over the next three months, the highest reading since September 1999.

A measure of house prices hit +58 in November, edging up from October to an 11-year high as government incentives and more optimism on the economy helped spur demand.

Prices rose for a second consecutive month in every area of Britain, while the average number of homes sold per chartered surveyor grew to 20.6, up from 15.9 in the same period of 2012.

But RICS warned again of a lack of homes available to buy.

"If there is not a 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," said Simon Rubinsohn, RICS's chief economist.

RICS forecast house prices would increase by 3pc next year and by almost 5pc a year over the next five years.

British house prices rose at their fastest pace in over six years in the three months to November, up 7.7pc year-on-year, mortgage lender Halifax said last week.

Bank of England Governor Mark Carney said on Monday the central bank was concerned about where Britain's housing market might head but it had tools to prevent the recovery from hitting "warp speed.

Separately on Tuesday, a group representing mortgage lenders predicted a rise in credit flowing into the housing market over the next two years but played down concerns about a bubble caused by the government's Help to Buy programme.

The Council for Mortgage Lenders (CML) forecast a rise in gross mortgage lending to £195bn next year, and £206bn in 2015, up from an estimated £170bn this year.

However, it saw a possible ceiling to the market, saying prices might peak during 2014 or 2015 due to new affordability rules, squeezed incomes, and verification checks on would-be borrowers.

The CML said the Help to Buy scheme, under which the government guarantees a portion of low-deposit mortgages, had strict rules about what kind of buyers can sign up, reducing the likelihood of defaults.

On November 28, the Bank of England refocused Britain's other programme to boost mortgage lending, the Funding for Lending Scheme, away from providing credit for house purchases.

 

 

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