A report released by Hometrack in August said overall city level house price inflation remained likely to hit 10pc growth this year, from its July rate of 8.5pc
UK property prices across the UK’s largest cities jumped by the highest quarterly level in 11 years as demand for housing continued to outstrip supply, according to property analyst Hometrack. The report said UK property prices across the country’s major cities lifted 4.3pc in the three months to July, the highest quarterly growth since 2004.
It also adds there is scope for further inflation as nine of the 20 cities the survey monitors still have average prices that are lower than their 2007 peak, while overall city level house price inflation remains on track for 10pc growth this year, from its July rate of 8.5pc. This upward pressure on UK property prices was due to a combination of low mortgage rates, economic growth and rising earnings continue to stimulate demand and put upward pressure on house prices.
Hometrack director of research Richard Donnell said: “There remains further upside for city level house prices over the remainder of 2015.” He added: “As an international city, London is out on its own, setting new highs for prices and affordability. How long this can be sustained is down to the prospects for the different segments of demand, specifically international buyers, domestic investors and domestic home owners.”
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In another report The Royal institute of Chartered Surveyors (Rics) stated; ‘UK house prices are forecast to rise by 25% over the next five years and become “ever more unaffordable”, largely because of an acute shortage of homes for sale, a leading property body has warned. It seems this shortage along with an increase demand is setting the stage for continual price growth in the immediate and foreseeable future. The average stock of houses per surveyor now stands at 52, down by around 12% since the start of 2015. At the same time, new buyer inquiries increased at their fastest rate in more than a year.
Meanwhile, the Halifax’s housing economist, Martin Ellis, last week warned that housing supply “remains extremely tight”. “The imbalance between supply and demand is likely to continue to push up house prices over the coming months.”
Rics members are also predicting rent rises averaging almost 3% over the next 12 months. The body said this reflected the fact that demand for rental properties was continuing to increase. “Contributors [to the survey] anticipate that rents will rise across all parts of the UK over the next three months.