Average house prices in the United Kingdom will see an increase of 8 percent next year, while the cost of renting a home is expected to rise by a further 2 percent, with growth is being driven by the acute imbalance between burgeoning buyer demand and sluggish supply with new instructions to estate agents close to stagnating.
Although significant challenges remain to achieving a sustainable economic recovery, 2014 may well see the nascent pick-up in activity gather pace and this will be reflected in the housing market, according to the findings in the annual RICS (Royal Institute of Chartered Surveyors) Annual Housing Market Focus 2014.
With the shortage of UK homes coming onto the market a key factor behind the price rises, some comfort may be drawn from a likely twenty percent jump in new starts in England over the next year. That would push the total towards the 155,000 mark compared to 125,000 this year and only around 100,000 in 2012. While this is an encouraging trend, it is still insufficient to address the more rapid growth in population and will leave significant shortfalls in all tenures.
Peter Bolton King, RICS Global Residential Director, said: “The cost of a house is now picking-up right across the country, and next year should see more of the same. We expect all areas of the country to see prices increase with London, predictably, recording the biggest rises.
“The improving economic picture aside, this is largely down to the fact that buyer numbers considerably outweigh the amount of homes on the market. While the number of new homes being built is now on the rise, it still won’t be anywhere near enough to meet demand and we expect the problem of insufficient housing stock to be the main driver behind price increases over the next twelve months."
As well as London, the East of England and East Midlands are predicted to show the largest price increased by RICS.
Andrew
Batt, International Group Editor of PropertyGuru Group, wrote this
story. To contact him about this or other stories email andrew@propertyguru.com.sg
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