UK House prices are expected to rise by 4.5 per cent for each of
the next five years - a cumulative increase of around 25 per cent according to
the RICS.
The culprit over the long term - as it has been in the short
term - is a shortage of stock. RICS says demand continues to considerably
outpace supply and the number of new instructions decreased in October for the
ninth month in succession.
In fact, the institution says the supply of new stock to the UK
market has been in decline since the middle of 2014, with the number of new
instructions only increasing in one of the months since then.
Demand, meanwhile, is strong. Following a small pick-up in agreed sales in
September, activity was little changed this month across the UK. This chimes
with HMRC transactions data, which continues to see the number of sales rising
consistently over the year.
“It’s 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
homes 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” says Simon Rubinsohn,
RICS chief economist.
“If the five year projections regarding the outlook for both
prices and rents is anything to go by, property is set to become even more
unaffordable going forward making the Government’s focus of boosting the
delivery of new-build homes absolutely critical.”
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