The following article discusses further price increases as a result of the lack of property on the market . In a recent report the findings displayed that a lack of houses for sale would drive prices higher next year, placing more pressure on the Government.
Surveyors see house price rises being fuelled further by a shortage of homes next year, with the number of properties on the market at a record low last month.
The Royal Institution of Chartered Surveyors (RICS) said it had measured declines in the number of homes being put up for sale over 10 consecutive months.
Reasons include the lack of alternative properties – especially new builds – affordability concerns and stamp duty changes which made prime property more expensive.
RICS said its survey showed an average of 45 homes listed for sale per surveyor in November – the lowest figure since its records began.
Surveyors said they expected construction to gain more momentum in 2016 but it would not be enough to cover pent-up demand.
It pointed to initiatives such as Help to Buy and starter homes – aimed at constructing 200,000 homes to sell to first-time buyers at a 20% discount – as likely boosting sales, supported by stamp duty cuts for the majority of transactions in the market.
The Government used the Autumn Statement and Spending Review last month to raise costs for buy-to-let purchasers and the buyers of second homes in a bid to help further tackle what it sees as an “ownership crisis”.
A recent report by Britain’s biggest mortgage lender, Halifax, expected house price growth to slow in 2016, fearing homes becoming increasingly unaffordable for first-time buyers – nervous about the prospect of interest rates starting to rise.
It also cited low levels of homes for sale as the core factor behind price growth – leaving buyers at the mercy of bidding wars to secure the property of their choice.
The chief economist for RICS, Simon Rubinsohn, said: “I can’t recall a set of comments in the residential survey which have so frequently drawn attention to lack of stock on the market.
“Given this, it is hard not to envisage prices continuing to climb upwards as we move through the early stages of 2016.
“It remains to be seen how successful the Government’s latest set of initiatives will be in driving up the rate of new build, but with the best will in the world it is likely that the boost to demand will come through rather more rapidly than the expansion of the development pipeline.”
Source : Sky News