UK house prices on the rise

House prices are likely to keep on rising, particularly in London where even a modest house can set you back as much as £500,000, according to a recent poll of Estate Agents.

A report published by the Royal Institution of Chartered Surveyors (RICS) revealed that confidence has hit a 14-year high.

It also reported that due to the increasing demand from buyers, the number of properties available is limited.

Although there have been some moves from the government to make it easier for housebuilders to construct new homes, the affordability of mortgages continues to decline.

In fact, the RICS figures also showed that 60 per cent of Estate Agents forecast prices will keep rising over the next quarter.

The findings were published as part of the latest monthly house price report for November 2013.

Simon Rubinsohn, RICS chief economist, said prices are surging ahead in many parts of the country.

He added: "The Bank of England's recent decision to withdraw the Funding for Lending scheme – which allows banks to borrow more cheaply and pass the benefits on to mortgage applicants – could well have some impact on the number of people able to purchase a home. Although the improvement in wholesale and retail funding markets may mean the impact on mortgages is relatively limited."

Earlier this month, the final Property Tracker report of 2013 from the Building Societies Association (BSA) revealed that just over a quarter (27 per cent) of homeowners said an increase in interest rates was their biggest worry for 2014.

Mr Rubinsohn said the problem of rising prices was aggravated by a shortage of stock.

He added: "One thing we are very concerned about, however, is the lack of both new and existing homes coming on to the market. As the chancellor pointed out last week, housebuilding is on the up, but it is not rising quickly enough to make up the shortfall that has built up in recent years."

Published 19th December, 2013

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