The latest survey of the UK residential housing market by the Royal Institute of Chartered Surveyors (RICS) shows that the number of houses sold in the UK is at its highest for nearly four years.
RICS expects house price growth to reach an average of 4.5 per cent a year for the next five years. RICS said that house prices will rise by 2.6 per cent this year and by 4.9 per cent each year for the next five years.
The accelerated growth of prices in London is set to continue with the capital predicted to see double the growth of the rest of the country at an average of nine per cent.
The organisation added that the net balance of headline prices and price expectations are at their highest level for more than 10 years, suggesting the UK property market is on course for a sustained recovery.
However, an article by the Council of Morgage Lenders (CML) suggests that the lack of supply of new properties is a major problem.
The CML said that in 2009 there were just 90,000 new homes built, well below the annual growth of new households at 232,000 a year.
The CML said Those numbers "are a salutary reminder that the supply of homes – and not just the supply of mortgages – is crucial in solving the UK's long-running housing problems."
Peter Bolton King, RICS Global Residential Director said: “It’s encouraging that the market is starting to improve in all parts of the country with more buyers looking to make a move and more sales going through.
“Even so, it’s a big concern that the supply of property coming to the market is lagging so far behind demand. This imbalance is likely to result in further upward pressure in prices over the coming months, particularly in the nation’s hotspots.”
RICS said that the recovery in the property market continues to “gather pace” as house sales reached their highest level since November 2009.
Its report said that the average number of properties sold by each individual chartered surveyor in the three months to September was 18.7. However, RICS said this was still low compared to historical rates.
RICS said that the increased number of sales has led to house price growth, with 54 per cent more respondents reporting price rises rather than falls.
The increase in house prices has been consistent since Easter and has occurred “right across the UK”. RICS found that prices have gone up in every part of the UK except the North East.
RICS said that the Help to Buy scheme has helped more suppliers to access the market and has helped demand for property go up with 49 per cent more buyers reporting a rise in new buyer enquiries.
However, a potential problem was flagged up by the surveyors. Although the number of homes for sale went up, it was not be enough to keep pace with the rising level of demand.
Looking ahead, RICS said “predictions for future growth are equally upbeat,” as a net balance of 56 per cent more respondents expect mortgage transactions to increase further over the next three months and 48 per cent more surveyors expect prices to continue to go up.
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