The Royal Institution of Chartered Surveyors (Rics) warns that “soaring demand” for property is leading to rising house prices.
The organisation warns that the lack of supply to cater for the increased demand partly caused by government initiatives to stimulate the property market such as Help to Buy is causing an imbalance in the market and stopping it from functioning properly.
Rics said that a lack of new homes “is proving problematic”.
The organisation said that the proportion of chartered surveyors reporting price rises hit an 11-year high, which, according to Rics “demonstrates the impact that the imbalance between supply and demand is having on the market.”
Rics said that buyer numbers are on the rise and “a greater willingness by lenders to increase loan to values on mortgage products allied to the Help to Buy scheme has meant that more and more first time buyers are in a position to enter the market.”
Rics said that lenders are willing to lend more and in combination with the Help to Buy scheme more and more first-time buyers are in a position to enter the market.
Simon Rubinsohn, RICS Chief Economist said: “The amount of homes currently up for sale is still nowhere near enough to keep up with demand and – in order for the market to function correctly – this imbalance urgently needs to be addressed.
“If we are to create a more sustainable market, it is critical that many more good quality homes are built in areas where people want to live,” added Mr Rubinsohn.
Alexander Gosling, director at Housesimple.co.uk, agreed with Rics concerns over the demand and supply imbalance.
He said: :"The Council of Mortgage Lenders has just announced that lending in the third quarter hit its highest quarterly level since the boom days of 2007.
"Property market demand was resurgent even before the Help to Buy scheme launched, and it is now being fanned by a combination of buyer confidence and people's fear that if they don't buy now they will be left behind.
"But look deeper and you'll see that a fundamental mismatch between demand and supply is driving up prices. This is artificially propping up house values, and many buyers are gambling on an economic recovery that is by no means in the bag."
As the numbers wanting to get a mortgage went up, Rics found that the number of people wanting to rent is falling. The proportion of surveyors reporting a rise in interest for rental property was at its lowest for a decade.
Meanwhile, official figures due to be released today by the Office of National Statistics (ONS) are expected to show house prices in the UK have reached a new record high.
Rics said that the number of properties sold by each of the 300 surveyors surveyed in the three months to the end of October reached 20.3, the highest number since February 2008 and transaction levels increased in each region indicating that the recovery in the housing market is spreading beyond London and the south-east.
Mr Rubinsohn said that house building has increased but no to the level required by the resurgent demand.
He said: "A greater willingness by lenders to increase loan to values on mortgage products allied to the Help to Buy scheme has meant that more and more first-time buyers are in a position to enter the market.
"In spite of this, the amount of homes currently up for sale is still nowhere near enough to keep up with demand and, in order for the market to function correctly, this imbalance urgently needs to be addressed.
"House building starts have picked up recently but we are still well behind in terms of the amount of properties needed."
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