Property investors will be interested to learn that expectations of future rises in UK house prices hit a 14-year high last month, according to a new report from The Royal Institution of Chartered Surveyors (RICS).
The RICS report found that 59 per cent of surveyors predicted that property prices across the country would rise over the coming three months, which was the highest level since September 1999.
A shortage of homes coming onto the market is resulting in increasing demand, which is pushing prices up, the report confirmed. RICS’s chief economist, Simon Rubinsohn, told Reuters: “If there is not a meaningful increase in new homes, the likelihood is that prices, and for that matter rents, will continue to push upwards, making the cost of shelter ever more unaffordable.”
A measure of house prices hit +58 in November of this year, rising from the month before to sit at an 11-year high, partly as a result of new Government incentives and increasing optimism as the economy continues its march back to health.
The RICS report suggests that property prices will increase by 3 per cent over the course of 2014 and by almost 5 per cent a year over the coming five years.
Meanwhile, UK construction also picked up speed last month, with output rising at the fastest rate in over six years. The latest Markit Purchasing Managers’ Index revealed that activity for the sector increased to 62.6 last month, up from 59.4 the month prior, with a reading of more than 50 signalling a strong growth in activity.
Senior economist with Markit, Tim Moore, confirmed that: “Construction activity continues to spring back to life during the final months of 2013.” Part of the reason behind the rise in construction activity has been put down to The Bank of England’s schemes aimed at boosting mortgage lending.