High demand sees property prices rise as house shortages affect the nation.
- Property values set for sustained growth as demand far outweighs supply
- House prices in October increased at the fastest rate since April
- The average cost of a house in England and Wales is expected to rise by £42,000 over the next five years
House prices are predicted to grow by 4.5% every year for the next five years with demand continuing to outpace supply.
The monthly report, published by the Royal Institution of Chartered Surveyors, stated the imbalance between the demand of would-be buyers and the number of homes for sale was causing countrywide price pressures.
In October the average house price rose by £2,500, with the annual house price growth rate across England and Wales at 5.2%, the fastest increase rate seen since April.
Simon Rubinsohn, Rics’s Chief Economist said: “It is hard to get away from the issue of supply when it comes to the current state of the housing market.
“The legacy of the drop in new build, following the onset of the global financial crisis, is now really hitting home, with both the sales and letting markets continuing to show demand outstripping supply on a month-by-month basis.”
Every region, excluding London and the East Midlands, had seen an increase in the number of sales in October. The number of homes put on the market has fallen month-on-month since February.
The expectation of a 4.5% year-on-year increase would lead the average cost of a house in England and Wales to rise by £42,000. Cost of renting is expected to rise at a similar rate, with demand for rented homes continuing to outstrip supply.